Apple’s Reported ChatGPT Deal Could Crown OpenAI as King of the Valley

Apple and OpenAI have reportedly forged a partnership to ingrain ChatGPT into the iPhone’s operating system, according to Bloomberg and The Information. The big news is expected to be announced at next week’s Worldwide Developers Conference. Apple seems to be the latest to join a large party of companies that have partnered with OpenAI’s Sam Altman. However, this deal is not like the others, and it could change the technology landscape for years to come.

Several outlets are reporting Altman’s deal with Apple as nearly a sure thing, which could make ChatGPT a core feature on every iPhone. If true, this could mark the end of a long-reported battle between Google and OpenAI to power the central AI chatbot on the iPhone. This would put Altman’s technology in front of hundreds of millions of highly coveted users and position OpenAI as a true power player over the long term in Silicon Valley.

While it’s unclear exactly how Apple plans to use OpenAI’s technology, the iPhone maker has discussed using ChatGPT to power Siri or potentially as a standalone app, according to The Information. Apple is also expected to offer its new AI features as an opt-in service, according to Bloomberg, so wary customers can steer clear of them. Apple reportedly remains in talks with Google about using Gemini on the iPhone but has yet to reach a deal.

Apple and OpenAI didn’t immediately respond to a request for confirmation about the partnership.

In 2002, Apple agreed to strike a deal with another hot startup at the time, letting Sergey Brin and Larry Page’s Google search engine power the Safari browser. That important agreement helped solidify Google as a dominant search engine on all Apple products and develop a monopoly that U.S. regulators are now trying to tear down 20 years later. As revealed in that case, Google paid Apple $20 billion for that privilege in 2022, signifying how important these default partnerships are. That’s not to say OpenAI’s partnership with Apple will be as long or as large as Google’s, but these defaults on iPhone matter.

Google now expects AI to replace Search, but it’s missed the mark on developing a convincing product. Google’s AI image generator was quickly scaled back for showing racial bias that CEO Sundar Pichai called “unacceptable.” Google Search’s AI Overviews also looked remarkably silly when unveiled last month, telling users to put glue on pizza and eat rocks for a healthy diet. While it’s unclear why Apple reportedly chose OpenAI over Google, these flubs may offer some ideas.

This deal gives Apple access to the hottest AI technology around, offering some much-needed innovation to a company that’s lacked it recently. The iPhone maker is undoubtedly late to the AI party, so it feels pressured to make a big splash on arrival. Apple reportedly decided that it was too far behind to compete with OpenAI and Google, so it employed the old adage: if you can’t beat ‘em, join ‘em.

However, Apple is expecting to release a slew of in-house AI features at WWDC next week. Voice memo transcriptions, automatic replies, and more may be handled by Apple’s on-device AI. But beyond that, Apple is reportedly thinking bigger than chatbots, hoping to one day build a pair of AI-powered robots the company is secretly developing. Bloomberg reports that one of the devices is a table-top robotic arm with a large, iPad-like display. The other is allegedly a mobile robot that can follow users around and handle chores. Airpods are also reportedly getting AI features and cameras at some point.

The AI environment has changed significantly since Apple first started talking with Google and OpenAI about these deals a few months ago. In recent months, the world has grown increasingly skeptical about OpenAI’s safety culture, and CEO Sam Altman’s purported truth-telling issues. But these valid issues raised by former employees are falling by the wayside, in Apple’s eyes. The iPhone maker needs to pick the strongest partner to usher in a successful AI era. Altman seems to have “moved fast and broken things” in getting to this point, and Apple’s partnership is vindicating that behavior.

In doing so, Apple will increase OpenAI and Sam Altman’s status as global tech giants. Apple has been in the business of king-making before, and it seems to have chosen its latest beneficiary.