OpenAI Considers Legal Action Against Apple Over Failed ChatGPT Partnership

Quick Facts

• OpenAI expected the Apple partnership to generate billions annually but revenue fell far short of projections
• The AI company has hired outside legal counsel to explore breach-of-contract options against Apple
• Apple is pivoting to Google’s Gemini models with a $1 billion annual deal while developing iOS 27’s Extensions system

OpenAI is exploring legal action against Apple after their two-year ChatGPT partnership failed to deliver the revenue and user growth the AI company expected, according to Bloomberg.

The startup enlisted an outside law firm to review potential breach-of-contract claims. OpenAI executives believe Apple failed to properly promote ChatGPT integration within Siri and other iOS features.

“They haven’t even made an honest effort,” an OpenAI executive told Bloomberg. The executive said Apple “basically said, ‘OpenAI needs to take a leap of faith and trust us,’ and it didn’t work out well.”

Revenue Expectations Missed

OpenAI hoped the Apple partnership would generate billions of dollars annually through ChatGPT subscriptions from iPhone users. The company viewed the deal as potentially matching Apple’s profitable Google Search partnership in Safari.

Those expectations never materialized. OpenAI currently generates $2 billion in monthly revenue, or roughly $24 billion annualized, but the Apple integration contributed little to that growth.

Internal OpenAI studies found users overwhelmingly preferred the standalone ChatGPT app over Apple’s built-in integrations. The company claims Apple’s implementation confused users and hurt OpenAI’s brand.

Apple Shifts Strategy

Apple struck a multiyear deal with Google in January to power Apple Intelligence with Gemini models. The company is paying Google roughly $1 billion annually for the partnership, with some analysts estimating the total contract value at $5 billion.

The iPhone maker is developing iOS 27’s “Extensions” system, expected to launch at the June Worldwide Developers Conference. Extensions will allow users to install rival AI chatbots from the App Store and route Siri queries through their preferred models.

Hardware Competition Emerges

Tensions escalated when OpenAI acquired Jony Ive’s AI hardware startup for $6.5 billion. The former Apple design chief brought several Apple executives to the project, which aims to build an iPhone alternative.

OpenAI has aggressively recruited Apple engineers with compensation packages worth millions more than Apple offered. Apple executives have been “fuming” over the recruitment tactics, according to the report.

Any legal action would likely wait until OpenAI concludes its ongoing federal trial with Elon Musk. The dispute highlights growing tensions as tech giants compete for AI dominance.

Read more: OpenAI reportedly mulls taking Apple to court over ChatGPT’s Siri integration