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Apple isn't paying OpenAI for access to ChatGPT: report

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Apple isn't paying OpenAI for access to ChatGPT: report
Apple announced that it would integrate OpenAI's ChatGPT into its devices. But people familiar with the deal told media that the iPhone maker wasn't paying OpenAI to use its product.

They said that instead, Apple thought the new deal would bring OpenAI's technology closer to hundreds of millions of users and would be of equal or greater value than a cash payment.

The sources also said, however, that this alliance between Apple and OpenAI wasn't expected to generate meaningful revenue for either company yet.

The deal could still be a win for both parties. Apple, for one, would benefit from offering users access to an advanced AI chatbot.

And OpenAI stands to reap the benefits of access to Apple's vast platform. Being integrated into devices means it's set to reach millions of Apple users, some of whom may upgrade to paid ChatGPT versions, access to which starts at $20 a month.

Apple and OpenAI didn't immediately respond to requests for comment from Business Insider sent outside regular business hours.

OpenAI may actually be getting a pretty good deal, considering that partnering with Apple doesn't often come free — Google paid the company $20 billion in 2022 to have its search engine be the default on iPhones and other Apple devices.

OpenAI's access to Apple users is also fairly extensive. At its Worldwide Developer's Conference on Monday, Apple announced it would add ChatGPT to its iPhone, iPad, and Mac products. Users are set to have access to writing tools, document reading, and image generation without switching between apps.

The tech giant also plans to integrate ChatGPT with Siri, the digital assistant built into Apple devices. Users can opt out of the integration and decide whether they want Siri to send their queries to ChatGPT.

Apple's WWDC keynote, which also discussed its in-house Apple Intelligence offerings, provided relief to investors who worried the company was falling behind in the AI race.

Analysts reacting to the OpenAI deal also predicted that the tie-up might dilute Apple's revenue, at least in the near term.

For one, analysts at Bernstein wrote after the WWDC keynote that while revenue sharing could benefit both firms, "some possible migration from traditional search queries" might still affect Apple's returns on the investment.

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