Apple and OpenAI aren't paying each other a dime

Google drops tens of billions of dollars every year just to keep its search bar pinned inside Safari. But when OpenAI partnered with Apple to bring ChatGPT to the iPhone, the dollar amount that changed hands was exactly zero.

According to a report from Bloomberg, neither Apple nor OpenAI is paying the other in their newly inked partnership. Instead of licensing fees or revenue cuts, the entire deal is currently powered by pure exposure.

The zero-dollar handshake

Apple's currency here is its massive hardware footprint. By plugging ChatGPT directly into hundreds of millions of iPhones, iPads, and Macs, Apple gives OpenAI a pipeline of mainstream users that no amount of marketing spend could ever buy.

In return, Apple gets a world-class external brain without spending a dime on enterprise model licensing. During WWDC 2024, Apple unveiled Apple Intelligence, its own suite of on-device and private cloud models. But when Siri runs into an open-ended question that outstrips Apple's internal systems, it can outsource the task to ChatGPT.

Privacy controls are heavily emphasized. Siri asks for permission on a per-request basis before sending anything out. OpenAI has agreed not to store or train on Apple user data, and users do not need an account to use the free tier, though paying subscribers can link their accounts for advanced models.

Setting up the real cut down the road

This free arrangement is likely just a honeymoon phase. Bloomberg reports that the partnership could eventually transition into a revenue-sharing agreement.

Apple is already in discussions with other LLM providers, including Google, to offer alternative models within the operating system. Once users can seamlessly subscribe to third-party AI services through iOS, Apple will almost certainly take its customary commission on recurring subscriptions.

Apple Intelligence and the optional ChatGPT rollout are slated for beta testing in the fall, with a gradual release planned across compatible devices.

Why it matters

Apple just pulled off a classic ecosystem masterclass. While competitors are spending tens of billions racing to train larger frontier models, Apple leveraged its ironclad grip on high-end hardware to get the world's most recognized AI model for free. It fills Siri's capability gaps instantly while offloading the massive computing bill onto OpenAI.

For OpenAI, however, the gamble is obvious. Gaining hundreds of millions of new users sounds great on paper, but serving inference calls to millions of casual iPhone users costs real money. If that massive influx of traffic doesn't translate into paid ChatGPT Plus subscriptions, OpenAI could find itself footing an enormous computing bill just to make Apple look good.

For everyday users, the setup is clean and non-invasive. You get on-demand frontier intelligence without mandatory logins or data tracking. But with Apple already flirting with Google and other model makers, OpenAI is being treated less like an exclusive ally and more like an interchangeable utility app that Apple can monetize whenever it wants.