OpenAI Prepares to Sue Apple, Another Partner Feels Burned

OpenAI is reportedly exploring legal action against Apple after a ChatGPT integration failed to deliver the subscriber growth and visibility the company had hoped for, according to Bloomberg News.

OpenAI has hired an outside law firm to evaluate its options, which may include sending a formal breach-of-contract notice to Apple without immediately pursuing a full lawsuit. Any legal action would likely wait until after OpenAI's ongoing trial with Elon Musk concludes.

This situation highlights how challenging Apple can be as a partner for major software companies. The iPhone offers a huge growth platform, but it's entirely under Apple's control, and third-party developers are essentially guests. Apple has a track record of showing the door to partners like Google and Adobe when they appear to get too comfortable.

TechCrunch has contacted both OpenAI and Apple for comment.

Announced at Apple's Worldwide Developers Conference in June 2024, the partnership integrated ChatGPT into Apple's operating systems as an option within Siri and as part of the iPhone's Visual Intelligence feature, which lets users analyze their surroundings with the camera and send photos to ChatGPT with related questions.

OpenAI and industry observers anticipated the deal could eventually generate billions in new subscriptions and give the company a prominent position within one of the world's most-used mobile ecosystems. Instead, Bloomberg reports, OpenAI has become increasingly frustrated, claiming the integration is buried, its features are hard to find, and revenue is far below 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 also has its own complaints, including concerns about OpenAI's privacy standards and, according to Bloomberg, frustration over OpenAI's hardware push, which is led by former Apple executives including ex-design chief Jony Ive.

OpenAI is far from the first Apple partner to regret tying its fortunes to the company. Apple has a pattern of embracing partners and then alienating them. The most famous example is Google Maps, which was a flagship feature of the original iPhone. Its removal in 2012—replaced by Apple's inferior Maps product—became one of the decade's biggest tech fiascos, prompting a rare public apology from CEO Tim Cook. Tensions between the two companies had been building for years, starting with the rollout of Google's Android phone a year after the iPhone's 2007 debut. After Google's then-CEO Eric Schmidt left Apple's board in 2009, the rivalry only grew.

Adobe also has its own scars. Steve Jobs refused to support Flash on the iPhone and iPad, publishing a famous open letter in 2010 explaining his reasoning, which effectively doomed the technology on mobile devices.

Spotify also spent years arguing that Apple used its control over the App Store to disadvantage competing 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 mended for commercial reasons. Google is now Apple's AI infrastructure partner, having signed a multiyear deal in January to power the next generation of Apple Intelligence with Gemini models. Apple is paying Google roughly $1 billion a year.

Meanwhile, OpenAI has also been dealing with strained relationships. Elon Musk's lawsuit against the company, which accuses OpenAI of abandoning its nonprofit founding mission and acting in bad faith, is currently in trial.

The company has also reportedly managed tensions with Microsoft, its largest backer and infrastructure partner, as it seeks more independence ahead of its own IPO ambitions.