OpenAI reportedly prepping legal action against Apple after partnership souring
▼ Summary
– OpenAI is exploring legal action against Apple over a ChatGPT integration that failed to deliver expected subscribers and prominence.
– OpenAI has hired an outside law firm to consider options, including a breach-of-contract notice, with any lawsuit likely delayed until after the Elon Musk trial.
– The ChatGPT integration, announced in June 2024, was buried in Apple’s operating systems and generated revenue far below projections.
– Apple has its own grievances, including concerns about OpenAI’s privacy standards and irritation over OpenAI’s hardware efforts led by former Apple executives.
– OpenAI’s frustration echoes past disputes between Apple and partners like Google Maps, Adobe, and Spotify, where Apple’s control led to tensions.
OpenAI is reportedly preparing for a potential legal confrontation with Apple, frustrated that the high-profile ChatGPT integration into Apple’s ecosystem has failed to generate the subscriber growth and visibility the AI company anticipated. According to a Thursday report from Bloomberg News, citing anonymous sources familiar with the matter, OpenAI has already retained an outside law firm to evaluate its legal options, which could include issuing a formal breach-of-contract notice to Apple. A full lawsuit is not imminent, however; any formal legal action would likely be postponed until after the conclusion of OpenAI’s ongoing trial with Elon Musk.
This development underscores a recurring theme in the tech industry: Apple’s notoriously difficult partnership dynamics. The iPhone remains one of the most lucrative platforms for software growth, but it operates under Apple’s ironclad control. Companies that build on it are effectively guests, and history shows Apple is quick to show them the door when they appear to overstay their welcome. Google, Adobe, and Spotify have all learned this lesson the hard way.
TechCrunch has reached out to both OpenAI and Apple for comment on the brewing dispute.
The partnership was first announced at Apple’s Worldwide Developers Conference in June 2024, positioning ChatGPT as a core option within Siri and as a key component of the iPhone’s Visual Intelligence feature. This feature allows users to point their camera at objects or scenes, send the image to ChatGPT, and ask related questions. OpenAI and industry observers alike expected this deal to eventually funnel billions of dollars in new subscriptions and give the company prime placement across one of the world’s most widely used mobile operating systems.
Instead, according to Bloomberg, OpenAI has grown increasingly exasperated. The company complains that the integration has been buried within the user interface, making its features difficult to find, and that revenue from the tie-up is falling far short of projections. “They basically said, ‘OpenAI needs to take a leap of faith and trust us,’” one OpenAI executive told Bloomberg. “It didn’t work out well.”
Apple, for its part, has its own list of grievances. Sources told Bloomberg that Apple has expressed concerns about OpenAI’s privacy standards and has been irritated by the company’s push into hardware, a venture led by former Apple executives including ex-design chief Jony Ive.
OpenAI is hardly the first partner to regret hitching its wagon to Apple. The most famous example is Google Maps, which was a flagship feature of the original iPhone. Its removal in 2012, replaced by Apple’s markedly inferior Apple Maps product, sparked one of the biggest tech fiascos of the decade and forced a rare public apology from CEO Tim Cook. The friction between the two companies had been building for years, fueled by the rise of Google’s Android platform and the departure of Google’s then-CEO Eric Schmidt from Apple’s board in 2009.
Adobe also bears scars from its partnership with Apple. Steve Jobs famously refused to support Flash on the iPhone and iPad, publishing an open letter in 2010 that effectively doomed the technology on mobile devices. Then there’s Spotify, which spent years arguing that Apple leveraged its control over the App Store to disadvantage rival music streaming services after launching Apple Music in 2015. The European Commission agreed, fining Apple nearly €1.8 billion in March 2024.
Sometimes these rifts can be resolved in the name of commercial interests. Google is now Apple’s AI infrastructure partner, having struck a multiyear deal in January to power the next generation of Apple Intelligence with Gemini models. Apple is paying Google roughly $1 billion a year.
Meanwhile, OpenAI has its own share of strained relationships. Elon Musk’s lawsuit against the company, which accuses OpenAI of abandoning its nonprofit founding mission and operating in bad faith, is currently at trial. The company has also reportedly navigated tensions with Microsoft, its biggest backer and infrastructure partner, as it pushes for greater independence ahead of its own IPO ambitions.
(Source: TechCrunch)
