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To pay for OpenAI integration, Apple offers exposure – Bloomberg

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To pay for OpenAI integration, Apple offers exposure – Bloomberg

Apple CEO Tim Cook attends the annual developer conference event at the company's headquarters in Cupertino, California, US, June 10, 2024

Carlos Barria/Reuters

The Apple-OpenAI deal hinges on a mutually beneficial partnership, with Apple offering wider distribution for ChatGPT

Apple isn’t paying OpenAI with direct financial remuneration for the integration of the latter’s ChatGPT into Apple devices, Bloomberg’s Mark Gurman reported.

Instead, the tech journalist known for accurately reporting on upcoming Apple plans and features reported that Apple believes OpenAI’s increased visibility from the deal has value equal to or greater than direct monetary compensation.

Apple in WWDC 2024 announced that users of compatible Apple devices will be able to tap into ChatGPT services easily. ChatGPT will be incorporated into every Apple operating system, and will include integration into Siri and Apple’s new Writing Tools, designed to generate, revise, and summarize text for the user. 

While the rollout of such features is limited to recent devices, and some may balk at using a third-party service that may collect usage data, the report mentions that costs may eventually become a concern for OpenAI.

With heavy adoption comes greater use, leading to a greater load to the Microsoft Azure cloud-computing systems that host ChatGPT. OpenAI will need to remunerate Azure’s owner Microsoft Corp more for the higher server strain, leading to heftier operating costs.

For now, OpenAI is taking a measured bet that native distribution via Apple devices is a beneficial move int the long run – an investment with payoffs not now but in the future.

It is also speculated that OpenAI, benefitting from the wider exposure among Apple users, might also earn from those feeling the need to upgrade to ChatGPT’s premium version. As listed on their website, OpenAI currently charges as low as $20 a month for the premium version of ChatGPT, also known as ChatGPT Plus. The upgrade includes access to more messages with GPT-4o and image generation via DALL-E. 

Beyond OpenAI, Apple may also be looking to partner with other AI services such as Google’s Gemini, and Anthropic. The report said, “The idea is to ultimately offer a range of AI services to users – similar to the way Apple has different search engine options in its Safari browser.”

OpenAI has set the precedent for such a partnership, but it remains to be seen whether those competing AI companies will follow similar deals.

In China where ChatGPT and Gemini are barred, the company may look for domestic AI partners. The company looks to involve other companies abroad like China’s Baidu, as reported by TechNode earlier this year. In a recent interview with Fast Company, Apple’s senior vice president of software engineering Craig Federighi disclosed their wish to involve China.  

“We certainly want to find a way to bring all of our best product capabilities to all of our customers […] in some regions of the world, there are regulations that need to be worked through […] We don’t have the timing to announce right now, but it’s certainly something we want to do,” Federighi said. – with reports from Rav Ayag/Rappler.com

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