Apple and OpenAI inked a deal to integrate ChatGPT with Siri as part of iOS 18 in 2024. According to a new report today, however, OpenAI is displeased with how the partnership has played out and is considering taking legal action against Apple.
According to Bloomberg, OpenAI lawyers are working with an outside legal firm “on a range of options that could be formally executed in the near future.” One possible outcome is that OpenAI sends Apple a notice “alleging breach of contract without necessarily filing a full lawsuit at the outset.” The report cites unnamed sources familiar with the matter, indicating growing tension between the two tech giants.
The partnership, announced at Apple’s Worldwide Developers Conference (WWDC) in June 2024, was a landmark moment for both companies. Apple integrated ChatGPT into Siri as a fallback for complex queries, image generation via Image Playgrounds, and visual intelligence features. In return, OpenAI gained access to hundreds of millions of iPhone users, a distribution channel that seemed unparalleled in the AI industry. However, the expected windfall of paid subscriptions has not materialized.
“OpenAI believed that the companies’ partnership, which wove ChatGPT into Apple software, would coax more users into subscribing to the chatbot. It also expected deeper integration across more Apple apps and prime placement within the Siri assistant,” the report says. Instead, OpenAI claims that Apple has been slow to roll out promised features and has not given ChatGPT the visibility it expected within the operating system.
An unnamed OpenAI executive, quoted by Bloomberg, alleges that the company has “done everything from a product perspective,” while Apple has not held up its end of the deal. “We have done everything from a product perspective,” the executive said. “They have not, and worse, they haven’t even made an honest effort.” This sentiment underscores a broader disillusionment with the terms of the agreement.
One aspect of the OpenAI integration into iOS is the ability to sign up for a paid ChatGPT subscription via the Settings app on iPhone. OpenAI reportedly believed this “could generate billions of dollars per year in subscriptions,” which apparently “hasn’t come close to happening.” The executive noted that when the deal was being negotiated, Apple was unwilling to share exact details about the product. “They basically said, ‘OpenAI needs to take a leap of faith and trust us,’” the executive said, adding that the deal ended up being a failure for the startup.
There is no money changing hands between Apple and OpenAI as part of this deal, outside of Apple getting a cut of those subscriptions. Apple is not paying OpenAI for use of its technology. This structure means OpenAI’s revenue from the partnership depends entirely on converting free users to paid subscribers, a conversion rate that has reportedly fallen far short of projections. Industry analysts note that while ChatGPT has a large user base, monetization remains a challenge, especially on iOS where Apple’s in-app purchase policies take a 30% cut.
OpenAI’s displeasure comes ahead of WWDC, where Apple is expected to announce a next-generation version of Siri powered by Google Gemini. iOS 27 will also reportedly let users integrate with other AI models, including Anthropic’s Claude. This diversification signals Apple’s intent to not rely on a single AI partner, mirroring a broader industry trend toward multi-model ecosystems. However, OpenAI’s executive clarified that opening the iPhone up to other AI models “isn’t driving the company’s legal action since the partnership wasn’t meant to be exclusive from the start.”
OpenAI wasn’t interested in working with Apple on the new models because it felt burned by the initial relationship, according to the people. “Apple has so much market power that they can dictate terms,” the executive said. “We already took this leap of faith with you, and it didn’t work out well.” This power imbalance is a recurring theme in platform partnerships, where smaller companies often rely on goodwill promises from dominant ecosystem controllers.
Meanwhile, OpenAI is also developing its own hardware products and has poached many Apple engineers to work on the devices. Additionally, that effort is being led by former Apple design chief Jony Ive. Apple executives “have been fuming for more than a year” over OpenAI’s recruiting tactics. The hardware project, shrouded in secrecy, is reportedly an AI-native device that could compete with smartphones, though timelines remain unclear. The talent drain from Apple to OpenAI has intensified the rivalry, adding a personal dimension to the corporate dispute.
Currently, ChatGPT is integrated throughout iOS, including as a fallback for Siri for world-knowledge queries. It’s also available via Image Playgrounds for image generation and Visual Intelligence. These features, while functional, have not achieved the deep integration OpenAI expected—such as full access to Siri’s contextual awareness or seamless invocation across all system apps. Critics point out that Apple’s own privacy and security restrictions limit how deeply third-party AI can be embedded, a constraint that may have been underestimated by both parties.
The legal action could take several forms, from a formal breach of contract notice to a full lawsuit. OpenAI hopes to resolve the issues outside of court, according to the report. “No final decisions have been made, and OpenAI still hopes to resolve its issues with Apple outside of court,” the report says. However, the very fact that legal preparations are underway indicates the depth of dissatisfaction.
This dispute highlights the challenges of AI integration in major platforms. Apple’s cautious approach to AI, prioritizing user privacy and on-device processing, often clashes with the needs of third-party AI providers that rely on cloud-based models and extensive data access. Meanwhile, Apple’s move to partner with multiple AI companies reflects a strategy of keeping options open, but it also risks alienating early partners like OpenAI.
From a broader perspective, the Apple-OpenAI saga is a case study in platform dependency. For AI startups, distribution through major operating systems is a double-edged sword: the potential user base is enormous, but the platform holder holds ultimate control over terms, visibility, and revenue sharing. OpenAI’s experience may serve as a cautionary tale for other AI companies negotiating similar deals with Apple, Google, or Microsoft.
The story continues to evolve as WWDC approaches. If Apple announces a Gemini-powered Siri, it could further strain relations with OpenAI. However, given that the partnership was non-exclusive, Apple’s decision to add other AI models is not legally problematic. Still, it may be seen as a lack of commitment, reinforcing OpenAI’s grievance. The coming weeks will likely see increased rhetoric from both sides, with OpenAI’s legal team preparing for a potential court battle that could redefine how AI partnerships are structured in the mobile ecosystem.
Source: 9to5Mac News