In a dramatic turn of events that could reshape the landscape of AI-powered virtual assistants, OpenAI is reportedly preparing legal action against Apple over the terms of their partnership involving ChatGPT integration with Siri. According to a detailed report from Bloomberg, the relationship between the two tech giants, which began with much fanfare as part of iOS 18 in 2024, has soured significantly. OpenAI lawyers are now working with an external legal firm to explore options including a potential breach of contract notice, which could be sent to Apple in the near future without immediately escalating to a full lawsuit.
The core of the dispute lies in unmet expectations. When Apple and OpenAI inked the deal, it was hailed as a landmark collaboration that would weave ChatGPT deeply into Apple's software ecosystem. OpenAI believed this integration would drive a significant number of users to subscribe to the premium version of ChatGPT, generating billions of dollars annually in subscription revenue. Additionally, the startup expected deeper integration across more Apple apps and prime placement within the Siri assistant. However, according to an unnamed OpenAI executive quoted by Bloomberg, Apple has not held up its end of the bargain. The executive stated, “We have done everything from a product perspective. They have not, and worse, they haven’t even made an honest effort.”
One of the key features of the integration is the ability for iPhone users to sign up for a paid ChatGPT subscription directly through the Settings app. This direct payment funnel was seen as a massive opportunity for OpenAI to capture a large segment of Apple's huge user base. Yet, the report indicates that the anticipated subscription surge has not materialized. “When we heard about this opportunity, it sounded amazing: being able to acquire a giant number of customers and have distribution in such a big mobile ecosystem,” the executive said. However, Apple was initially vague about the final product, asking OpenAI to “take a leap of faith and trust us.” That leap, according to the executive, has ended in failure for the startup.
The financial structure of the deal is also a point of contention. There is no direct money exchange between Apple and OpenAI for the use of ChatGPT technology. Instead, Apple receives a cut of the subscription revenue generated through its platform. This model places the entire revenue risk on OpenAI, while Apple benefits from providing the distribution channel. Given that the expected subscriber numbers have not been achieved, OpenAI now feels that the deal is not just insufficient but actually harmful to its business prospects.
Adding to the tension is Apple's upcoming strategy at its Worldwide Developers Conference (WWDC). The report states that Apple is expected to announce a next-generation version of Siri powered by Google Gemini. Furthermore, iOS 27 is rumored to allow users to integrate with other AI models, including Anthropic's Claude. While an OpenAI executive claimed this expansion is not driving the legal action, as the partnership was not intended to be exclusive, it undoubtedly adds pressure. The executive explained, “Apple has so much market power that they can dictate terms. We already took this leap of faith with you, and it didn’t work out well.” Nevertheless, Apple's move to embrace multiple AI providers might be seen as a direct challenge to OpenAI's perceived value in the partnership.
The legal threat emerges against a backdrop of broader competition between the two companies. OpenAI is actively developing its own hardware products, a venture led by former Apple design chief Jony Ive. The startup has poached a number of Apple engineers to work on these devices, a hiring spree that has reportedly “fumed” Apple executives for over a year. This talent drain, combined with the legal dispute, suggests the relationship may be irreparably broken. Apple is unlikely to concede to OpenAI's demands without a fight, especially given its own ambitions in AI.
Currently, ChatGPT is integrated throughout iOS in several ways. It serves as a fallback for Siri when handling world-knowledge queries that Siri cannot answer. It is also available via Image Playgrounds for image generation and Visual Intelligence features. However, from OpenAI's perspective, these integrations have not been sufficient to drive the massive user adoption they anticipated. The company had hoped for a more prominent and seamless placement, perhaps making ChatGPT the default AI assistant in key scenarios. Apple's cautious approach to AI, prioritizing privacy and its own proprietary technologies, likely limited the extent of the integration.
The legal options being considered include sending a formal notice alleging breach of contract, which could force Apple into negotiations or risk a costly lawsuit. Bloomberg reports that no final decisions have been made, and OpenAI still hopes to resolve the issues outside of court. However, the preparation for litigation indicates a serious breakdown in trust. If a lawsuit does materialize, it could become one of the most high-profile antitrust or contract disputes in the tech industry, potentially affecting how future AI partnerships are structured between platform holders and third-party developers.
From a regulatory perspective, such a case might attract the attention of antitrust authorities in the U.S. and Europe. Apple's tight control over its ecosystem, including mandatory commissions and restrictions on app distribution, has already been the subject of multiple investigations. A dispute with a major AI partner could further fuel arguments that Apple uses its market power to extract unfair terms. On the other hand, OpenAI's own practices, including its rapid hiring of Apple engineers and its hardware ambitions, could be scrutinized as well.
The timing is critical, as the tech industry watches closely to see how AI integration deals will evolve. Apple's strategy of opening Siri to multiple AI models might become a blueprint for others, allowing users to choose their preferred assistant. But that approach could also fragment the user experience and reduce the incentives for any single AI provider to invest deeply in integration. OpenAI, having been an early mover, may now see itself as a cautionary tale. The company's decision to pursue legal action could force Apple to renegotiate terms or face legal and public relations consequences.
In the meantime, the day-to-day operation of ChatGPT on iOS continues. Users can still access the chatbot for free and subscribe through the Settings app. However, the reported disappointment from OpenAI suggests that the partnership is not delivering the hoped-for returns. As WWDC approaches, all eyes will be on Apple's announcements and how they address the simmering conflict. Whether through a quiet settlement or a public legal battle, the outcome will shape the future of AI assistants and the roles of big tech companies as gatekeepers of these powerful tools.
Source: 9to5Mac News