At the WWDC 2024, Apple announced a partnership with the AI giant OpenAI to integrate ChatGPT into the iPhone. As part of the deal, Apple will include ChatGPT’s expertise in its own voice assistant and text generation tools. Usually, such a partnership would entail one company paying up front to the other, but that isn’t the truth in this case.
According to reports from early June, Apple isn’t paying OpenAI for including ChatGPT and its underlying language processing models in the iPhone. Instead, both Apple and OpenAI are counting on converting potential free users into paid subscribers, which would pay for the latter’s technical resources and add to the former’s revenue.
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Apple Intelligence Isn’t Here Yet, But We’re Talking About Apple Intelligence+
However, charging commissions from a small number of users isn’t exactly what Apple has in mind. According to a new report by Bloomberg’s Mark Gurman, Apple could start charging for the GenAI features. The tech giant could bundle Apple Intelligence as one of the benefits of the Apple One service, which offers the GenAI features, along with regular subscriptions such as iCloud, Apple TV+, Apple Music, etc.
Though Apple Intelligence should be free initially, the company plans to make money off the GenAI capabilities on the iPhone. Considering how long AI-based features are available on the competition for free, Apple could either start charging for the first lot of Apple Intelligence abilities that roll out in September 2024 (through early 2025) or launch a new tier called Apple Intelligence+.
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What Would Apple Intelligence+ Entail?
As the name suggests, Apple Intelligence+ will offer users some additional features over the regular GenAI features they can access for free. This, combined with the commission on subscription via the App Store, could be the ideal spot that the company would want to place itself into. Behind this move is Apple’s drive to strengthen its software and services division, which witnessed a growth in revenue in 2024’s second quarter. At the same time, the hardware division seems to have hit a plateau.
It is important to mention that Apple’s deal with OpenAI isn’t exclusive and that the tech behemoth is also in talks with Google to incorporate Gemini into its iPhones and other AI services. If there’s a deal at all, it should be finalized by the end of this year, implying that Gemini-powered GenAI features could arrive on iPhones with a mid-year iOS update in 2025. However, readers should take this information with a pinch of salt, as Apple hasn’t confirmed anything yet.
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Apple To Get A Front-Row Seat At OpenAI’s Board
As part of its collaboration with OpenAI, Apple has reportedly secured an observer position on the ChatGPT-maker’s board. The head of Apple’s App Store, Phil Schiller, will be on OpenAI’s board. It is important to mention that Apple won’t have any decision-making rights over the company; however, the observer’s role grants the company a seat at OpenAI’s board meetings, which determine the company’s future.
The addition to OpenAI’s board will be effective later this year. Stay tuned for more updates on Apple’s AI advancements and other iPhone-related news.
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