OpenAI is considering legal action against Apple after expected benefits from its deal to integrate technology into the iPhone have failed to materialise since the arrangement began in 2024, Bloomberg reported.
The start-up’s lawyers are actively working with an outside law firm on a range of options for the near future, which could include sending a formal notice to Apple alleging breach of contract, without necessarily filing a full lawsuit right away, the report said, citing unnamed people.
The law firm was reportedly retained in recent days to help deal with the situation.
Legal options
Any fresh action is unlikely until OpenAI has concluded its litigation with entrepreneur Elon Musk, who co-founded the start-up and is suing over its for-profit conversion. Bloomberg’s report said OpenAI still hopes to resolve its differences with Apple outside of court.
OpenAI reportedly believed the deal would help drive subscriptions, and that it would receive more exposure in the Siri assistant and other Apple apps, but instead OpenAI feels that ChatGPT exposure remains limited.
It has reportedly not seen the expected rise in subscriptions, which it believed could amount to billions of dollars a year in revenue.
Apple’s OpenAI integration with Siri means users must often specifically use the word “ChatGPT” to get results from the chatbot, and when results are produced they are far more limited than through the OpenAI app, displaying only a text summary in a notification box rather than the elaborate results, including images, from the OpenAI app.
OpenAI reportedly feels Apple hasn’t sufficiently promoted the arrangement, and that its implementation has harmed OpenAI’s brand with customers.
Disappointment
An OpenAI executive told the news service the start-up had been obliged to take a “leap of faith” and trust Apple due to Apple’s large smartphone market share.
The OpenAI executive told Bloomberg the company was reluctant to work with Apple on new AI initiatives because “we already took this leap of faith with you, and it didn’t work out well”.
Apple has reportedly had concerns from the beginning with OpenAI, particularly over its handling of user privacy, and was forced to make its deal with the start-up due to its own lack of progress with developing AI models in-house.
More recently, OpenAI has created friction with Apple by working with former Apple design chief Jony Ive on a hardware project and hiring away Apple engineers to work on the project.
Apple recently cut a deal with Google to use Google’s Gemini software to revamp Siri, and is expected to allow competing AI providers to integrate with its apps in a feature called Extensions that’s due to be announced at its developer conference on 8 June, with delivery planned for the autumn.
