OpenAI is reportedly preparing legal action against Apple; it wouldn’t be the first partner to feel burned
OpenAI is so frustrated with Apple over a ChatGPT integration that failed to deliver the subscribers and prominence it expected that the company is now actively exploring legal action against the iPhone maker.
OpenAI is so frustrated with Apple over a ChatGPT integration that failed to deliver the subscribers and prominence it expected that the company is now actively exploring legal action against the iPhone maker, Bloomberg News reported Thursday , citing people familiar with the matter.
According to Bloomberg, OpenAI has enlisted an outside law firm to work through its options, which could include sending Apple a formal breach-of-contract notice without necessarily escalating to a full lawsuit (at least not immediately). Any legal move would likely wait until after the conclusion of OpenAI’s ongoing trial with Elon Musk.
Still, it’s a reminder of what a difficult partner Apple can be for major software companies. The iPhone is an enormously attractive platform for growth, but it’s fully under Apple’s control — and companies that build there are only guests. From Google to Adobe, there’s a long history of Apple showing guests the door when they seem as if they’re getting too comfortable.
TechCrunch has reached out to both OpenAI and Apple for comment.
The OpenAI partnership, announced at Apple’s Worldwide Developers Conference in June 2024, wove ChatGPT into Apple’s operating systems as an option within Siri and as part of the iPhone’s Visual Intelligence feature (allowing users to use their camera to analyze their surroundings and send photos to ChatGPT with related questions).
OpenAI, along with industry watchers, expected the deal might eventually funnel billions of dollars in new subscriptions its way and give the company prime real estate across one of the world’s most-used mobile ecosystems. Instead, Bloomberg reports, OpenAI has grown increasingly aggravated, complaining that the integration has been buried, its features hard to find, and that revenue from the tie-up is nowhere close to 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 grievances, including concerns about OpenAI’s privacy standards and, according to Bloomberg, irritation over OpenAI’s push into hardware, an effort led by former Apple executives, including ex-design chief Jony Ive.
Either way, OpenAI is hardly the first partner of Apple to regret hitching its wagon to the company. Apple has a long history of embracing partners and then alienating them. The most famous case is Google Maps, which was a flagship feature of the original iPhone. It was so central to the device's appeal that its removal in 2012 — replaced by Apple's markedly inferior Apple Maps product — became one of the biggest tech fiascos of the decade, prompting a rare public apology from CEO Tim Cook.
The friction between the two companies had been building for years at that point, thanks to the rollout of Google's Android phone a year after the iPhone's 2007 debut; after Google's then-CEO Eric Schmidt stepped down from Apple's board in 2009, that rivalry only intensified.
Adobe has some scar tissue, too. Steve Jobs refused to support Flash on the iPhone and iPad, publishing a famous open letter in 2010 explaining why and effectively dooming the technology. Flash never recovered its footing on mobile.
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 overcome in the name of commercial interests. Google is now Apple's AI infrastructure partner, having struck a multiyear d eal in January to power the next generation of Apple Intelligence with Gemini models. Apple is paying Google roughly $1 billion a year.
In the meantime, OpenAI has had its own share of strained relationships lately. 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.
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Key takeaways
- OpenAI's action against Apple reflects the risks of partnerships with dominant platforms.
- OpenAI's frustration may lead other companies to reassess their integration strategies.
- The unequal power dynamic may result in a less collaborative ecosystem.
Editorial analysis
The potential legal action by OpenAI against Apple highlights a growing tension between tech companies seeking strategic integrations on dominant platforms. For the Brazilian tech sector, this situation serves as a warning about the risks associated with partnerships with tech giants. Apple, known for its strict control over its ecosystem, can be a double-edged sword: it offers access to a vast market but can also limit the visibility and growth potential of partners. This is particularly relevant for startups and growing companies in Brazil, which may be lured by the promise of collaboration but must be aware of potential pitfalls.
Moreover, OpenAI's frustration with the integration of ChatGPT into Apple devices raises questions about the effectiveness of such collaborations. The expectation that the partnership would generate billions in new subscribers has not materialized, which may lead other companies to reassess their integration strategies with established platforms. This case also suggests that Apple may be more focused on protecting its own interests and maintaining control over the user experience rather than fostering a truly collaborative ecosystem.
What we observe is an unequal power dynamic, where Apple, as the platform provider, can dictate the terms of collaboration. Moving forward, it will be interesting to see how OpenAI and other tech companies respond to this situation. We might witness a shift towards more balanced partnerships or even greater resistance to relying on platforms that do not offer guarantees of support and visibility. For Brazil, this could mean an opportunity to develop local solutions that do not depend solely on integrations with large international platforms, fostering a more self-sufficient and innovative ecosystem.
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