OpenAI readies legal action against Apple as ChatGPT-Siri deal collapses

OpenAI is preparing to take legal action against Apple, accusing the tech giant of failing to deliver on a partnership that was supposed to turn ChatGPT into a default feature of the iPhone ecosystem. According to Bloomberg, lawyers for OpenAI are working with an outside firm to explore options that could include sending Apple a formal breach-of-contract notice. While no lawsuit has been filed yet, and OpenAI has stated it prefers to resolve the matter out of court, the company has concluded that Apple did not uphold its end of a two-year-old deal.

The core issue is distribution. OpenAI believed that integrating ChatGPT into Siri, Writing Tools, and Image Playground would drive a massive wave of iPhone users toward paid subscriptions, potentially generating billions of dollars per year. Instead, Apple’s implementation buried the integration behind friction. Users must explicitly say the word “ChatGPT” when speaking to Siri to trigger OpenAI’s models. Responses appear in constrained windows with limited information, and user studies conducted by OpenAI show that customers overwhelmingly prefer using the standalone ChatGPT app.

The deal, announced with considerable fanfare in June 2024, was struck when Apple was scrambling to catch up on generative AI. It gave iPhone users access to ChatGPT results through Siri, text generation, image analysis via Visual Intelligence, and picture creation in Image Playground. Apple took a cut of subscription revenue, and OpenAI expected prime placement inside an ecosystem of more than a billion active devices. That placement never materialized as hoped. An OpenAI executive, speaking anonymously to Bloomberg, said Apple had not made an honest effort to promote the integration. The company now believes the implementation has actively damaged its brand, with limited, windowed responses creating an impression of inferior capability compared with the full ChatGPT experience.

During initial discussions in 2024, Apple compared the opportunity to its search deal with Google in Safari, a partnership that generates tens of billions of dollars annually for both sides. That comparison has proved spectacularly inapt. The same executive said OpenAI was told to take a leap of faith, and the leap did not pay off.

The rift with Apple is not happening in isolation. OpenAI is simultaneously fighting a federal trial with Elon Musk over its nonprofit-to-profit conversion, with potential damages of $150 billion. It recently renegotiated its exclusive deal with Microsoft, capping revenue-sharing payments at $38 billion through 2030 and shifting to a non-exclusive licensing model. Amazon has deepened its investment in Anthropic with an additional $5 billion. Apple, meanwhile, has its own grievances. The company has been concerned about OpenAI’s privacy practices. And OpenAI’s $6.5 billion acquisition of io, the device startup co-founded by former Apple design chief Jony Ive, has created a direct competitive threat. The business, now run by former Apple executives Tang Tan and Evans Hankey, is working to build an alternative to the iPhone. Apple executives have been fuming over OpenAI’s recruitment of Apple hardware engineers, with the AI company offering stock packages worth millions more than Apple provides.

Any legal action by OpenAI is unlikely before the conclusion of the Musk trial, according to Bloomberg’s sources. The timing suggests OpenAI is managing its legal exposure carefully, avoiding a second front while the first remains unresolved.

As the partnership deteriorates, Apple is preparing to diminish OpenAI’s role in its software. iOS 27, expected to be unveiled at the Worldwide Developers Conference on June 8, will introduce a system called Extensions that allows users to install rival AI chatbots from the App Store and route Siri queries, writing tasks, and image generation through whichever model they choose. Apple is testing integrations with both Anthropic’s Claude and Google’s Gemini. Separately, Apple struck a deal late last year to use Google’s Gemini models as the foundation for its own AI capabilities, paying roughly $1 billion annually for a custom 1.2-trillion-parameter model that will power the next generation of Siri. OpenAI was considered for this deeper integration but declined to participate, feeling burned by the original relationship.

The OpenAI executive told Bloomberg that Apple’s embrace of other providers is not driving the legal dispute, since the partnership was never meant to be exclusive. The new Extensions system might even benefit ChatGPT by giving it more prominent placement through a model-picker interface. But the broader trajectory is clear: Apple is building an AI architecture designed to reduce its dependence on any single provider, and OpenAI is moving from privileged partner to one option among several.

Apple’s AI strategy has been defined by a series of forced compromises. The company marketed AI features for the iPhone 16 that were not ready, leading to a $250 million class-action settlement over false advertising. It partnered with OpenAI because its own models were inadequate, then found the partnership unsatisfying. It turned to Google for the underlying intelligence that its in-house team could not deliver. At each stage, the company that built its reputation on vertical integration has been forced to depend on others for the capability its customers expect.

For OpenAI, the Apple experience is a lesson in the limits of distribution without control. Being inside the iPhone sounded like a growth engine. In practice, it meant accepting Apple’s design choices, Apple’s revenue terms, and Apple’s willingness or unwillingness to promote the product. The company that believed it was getting a Safari-scale partnership got something closer to a buried settings toggle. Whether the dispute escalates into litigation or resolves through renegotiation, the strategic picture has already shifted. OpenAI is building hardware. Apple is building its own AI stack. The deal that once symbolized their mutual need now illustrates why the two largest ambitions in consumer technology, owning the device and owning the intelligence, may be fundamentally incompatible as long-term partnerships.