The two companies are negotiating final terms for an agreement to use ChatGPT features in the next iPhone operating system, according to multiple sources who spoke anonymously to Bloomberg. Earlier this year, Apple reached a remarkable milestone, hitting an all-time high market share (20.1 percent) after 3.7 percent growth the prior year, which analysts say represents a “shifting of power” in the smartphone market. ChatGPT, which is considered one of the most sophisticated language models ever developed, generated $1.6 billion in revenue in 2023, and was recently valued at $29 billion. In January 2024, ChatGPT set a record for the fastest user growth after reaching 100 million active users. Sources told Bloomberg that Apple has also engaged in discussions with Google about potentially licensing their AI chatbot Gemini, but no agreement has been reached. Under the new partnership, OpenAI would allow Apple to offer its chatbot as part of a new suite of AI features the smartphone manufacturer is planning to announce next month, Bloomberg reported. At the heart of Apple’s AI strategy are two key priorities, as Forbes reported: privacy and security. AI required large amounts of data in order to learn. Integrating ChatGPT directly into an iPhone’s operating system offers a higher degree of security, as more data remains on the device, rather than being sent to third-party cloud servers. As Forbes explained, Apple is already making more powerful chips needed to process AI tools. The company is also “putting its own Mac-grade chips in its servers, which will give it more control over cloud-based capabilities for AI.” Apple CEO Tim Cook said last year, “We’ve obviously made enormous progress, integrating AI and machine learning throughout our ecosystem. And we weaved it into products and features for many years.” During an earnings conference call last week, Cook said, “We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era, including Apple’s unique combination of seamless hardware, software and services integration.”Apple Inc. is in the final stages of solidifying the details of a deal to integrate OpenAI into the iPhone.
