Apple and OpenAI recently struck a deal that will see the tech giant compensate the AI company for the use of its ChatGPT technology through distribution, rather than traditional financial means. This means that the eyeballs of every iPhone user in America are worth much more than billions of dollars to OpenAI.
Bloomberg reports that the recently announced partnership between Apple and OpenAI, criticized by conservatives as creating a “woke AI Death Star” which will integrate the AI-powered ChatGPT into Apple’s Siri virtual assistant and new writing tools across its iPhone, iPad, and Mac platforms, has raised questions about the financial arrangements between the two companies. According to sources familiar with the matter, Apple will not be making direct monetary payments to OpenAI for the use of its technology. Instead, the iPhone maker believes that the exposure and distribution of OpenAI’s brand and technology to its vast user base is of equal or greater value than cash compensation.
This unorthodox arrangement is part of Apple’s broader push into the world of artificial intelligence, as showcased during the company’s annual Worldwide Developers Conference. Alongside the OpenAI partnership, Apple unveiled its own suite of in-house AI features, collectively known as Apple Intelligence.
While the collaboration with OpenAI is not exclusive, and Apple is reportedly in talks with Google to offer its insanely woke Gemini chatbot as an additional option, the partnership could prove costly for OpenAI in the long run. The AI company relies on Microsoft’s Azure cloud-computing systems to host ChatGPT, and the increased usage resulting from the Apple integration could lead to a significant rise in computing expenses.
Despite the potential costs, both Apple and OpenAI stand to benefit from the partnership in the future. The companies could monetize the integration by converting free users to paid accounts, with OpenAI’s subscription plans starting at $20 a month for additional features. Furthermore, Apple aims to generate revenue from AI by establishing revenue-sharing agreements with AI partners that monetize chatbot results on its platforms, potentially offsetting any losses from the declining relevance of traditional search engines.
The partnership between Apple and OpenAI is not without its issues, particularly when it comes to expanding the AI services to other languages and countries. Apple faces potential hurdles in China, one of its biggest overseas markets, where services like ChatGPT and Gemini are currently barred. The company is considering arrangements with local Chinese providers, such as Baidu and Alibaba Group Holding, to handle chatbot features in the region.
Read more at Bloomberg here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.