Partnership between Apple and OpenAI goes sour and could end up in court

Apple’s two-year partnership with OpenAI has become tense, according to people familiar with the matter, with the AI ​​startup failing to see the expected benefits of the deal and now preparing possible legal action.

OpenAI lawyers are actively working with an outside law firm on a number of options that may be formally pursued in the near future, said the people, who asked not to be identified because these are private deliberations.

This could include sending the iPhone maker a notice alleging a breach of contract, without necessarily immediately filing a full lawsuit, these people said. OpenAI hired the external office in recent days to help with the situation.

OpenAI believed that the partnership between the companies, which integrated ChatGPT with Apple’s software, would encourage more users to subscribe to the chatbot. The startup also expected deeper integration into more Apple apps and a greater prominence within the Siri assistant.

Instead, Apple’s use of OpenAI technology in its operating systems remains limited, and resources can be difficult to find.

“We did everything we could from a product perspective,” said an OpenAI executive who asked not to be identified. “They didn’t and, worse, they didn’t even make an honest effort.”

Spokespeople for OpenAI and Apple declined to comment.

Apple shares fell to session lows on Thursday on the news, falling as much as 1.2% to $295.38. The stock was up 10% in the year until Wednesday’s close, in line with the S&P 500.

For OpenAI, the friction adds to a scenario of fragmented relationships in the world of technology. The company is in a legal dispute with Elon Musk, one of its co-founders, and recently renegotiated an exclusive agreement with Microsoft, its biggest supporter. Amazon.com, in turn, strengthened ties with OpenAI rival Anthropic.

Apple also has its own concerns about OpenAI, including questions about whether the company does enough to protect users’ privacy. And a recent push by the startup to manufacture devices — an endeavor overseen by former Apple executives — has troubled the iPhone maker.

Any legal action from OpenAI is unlikely to come before the conclusion of the trial involving Musk, according to the people. No final decision has been made, and OpenAI still hopes to resolve its issues with Apple out of court.

The two Silicon Valley companies seemed, at another time, to be heading towards a broad strategic relationship. In June 2024, OpenAI CEO Sam Altman was in the audience at Apple’s campus when the deal was announced — when Craig Federighi, Apple’s head of software, called the startup a “pioneer and market leader” in artificial intelligence.

The arrangement allowed users to access ChatGPT results within Siri and use AI technology to generate text and analyze surrounding objects through the iPhone’s Visual Intelligence feature. The partnership was later expanded, with Apple adding ChatGPT as an option for creating images in its Image Playground app and analyzing content displayed on the screen.

As part of the agreement, iPhone users now have a way to subscribe to ChatGPT directly from the iOS settings menu — with Apple taking a share of the subscription revenue generated through its platforms.

OpenAI executives believed the deal could eventually become an important source of revenue as the company works toward an initial public offering (IPO). Instead, the relationship deteriorated, the people said, and OpenAI’s attempts to renegotiate the deal stalled.

According to usage studies conducted by the AI ​​startup — described by people with knowledge of the matter — Apple customers are much more likely to turn to the standalone ChatGPT app than to access OpenAI’s technology through Siri and other Apple services.

The way Apple designed the integration means that users often need to specifically invoke the word “ChatGPT” when speaking or typing a command into Siri to get results from OpenAI. The answers are also more limited than those available in OpenAI’s own app: they appear in a small window, with less information.

Additionally, OpenAI executives believe that Apple has not sufficiently promoted integration across the iPhone, iPad and Mac ecosystem.

Initially, OpenAI believed that the agreement could generate billions of dollars per year in subscriptions — something that did not come close to materializing. The company now also believes that Apple’s implementation harmed the OpenAI brand with customers.

“When we learned about this opportunity, it seemed incredible: being able to acquire a huge number of customers and have distribution in such a large mobile ecosystem,” said the OpenAI executive. At the time, however, Apple declined to detail exactly what the product would look like, he said.

“Basically, they said, ‘OpenAI needs to take a leap of faith and trust us,’” the executive reported, adding that the deal ended up being a failure for the startup.

In the coming months, OpenAI is expected to lose its exclusive role within Apple software. According to Bloomberg Newsthe iPhone maker is opening its platforms to a number of rival providers later this year.

This means that customers will be able to install various AI chatbots from the App Store and use them to answer questions within Siri or to handle image and text generation.

Apple is testing integrations with Anthropic’s Claude and Google Gemini as part of this initiative. A revamped Siri with this kind of capability — part of the iOS 27 operating system — is expected to be unveiled at Apple’s Worldwide Developers Conference on June 8.

Since 2024, Claude and Gemini have become ChatGPT’s strongest competitors. Anthropic is in early talks to raise funds at a valuation exceeding $900 billion, Bloomberg News reported this week, in a move that underscores the company’s rapid rise.

Read more: Anthropic negotiates fundraising of US$30 billion at a value of US$900 billion

The OpenAI executive stated that Apple’s openness to other AI providers is not prompting the company’s legal action, as the partnership was not designed to be exclusive from the start.

And the new integration system in iOS 27, known as Extensions, could actually give ChatGPT more visibility — even as competition increases. In a new system search interface, users will see an AI model selector, which will include both Siri and external alternatives, such as OpenAI’s offering.

During initial discussions about a 2024 deal, Apple described the arrangement as an opportunity comparable to its partnership with Google for its Safari browser search engine, according to people familiar with the conversations. This partnership generates tens of billions of dollars in annual revenue for both sides.

The ChatGPT integration is separate from an effort to revamp Apple’s core AI models with technology from the Google Gemini team. Apple closed this deal late last year after considering a broader arrangement with OpenAI.

OpenAI was not interested in working with Apple on the new models because it felt “burned” by the initial relationship, according to the people. “Apple has so much market power that it can dictate the terms,” said the executive. “We already took this leap of faith with you, and it didn’t work.”

Apple is paying Google about $1 billion a year to use its AI technology, the company said. Bloomberg last year. CEO Tim Cook said in February that Apple partnered with the company because it believed “Google’s AI technology would provide the most capable foundation” for its artificial intelligence efforts.

At the same time, OpenAI is emerging as a potential competitor to Apple in hardware. Last year, the AI ​​company acquired a next-generation device startup co-founded by former Apple design chief Jony Ive, creating a new source of tension. That business, led by former Apple executives Tang Tan and Evans Hankey, is now working to create an alternative to the iPhone and other devices.

Apple executives have been angered for more than a year by the way OpenAI has recruited engineers from its hardware team, the company reported. Bloomberg News. To attract talent, the AI ​​company has been offering stock packages worth millions of dollars more than what Apple pays.

As recently as 2024, Apple already had separate concerns about ChatGPT’s privacy standards. But the company felt it had no choice but to integrate the technology, knowing that its own internal generative AI capabilities were still far from ready, according to people with knowledge of the decision.

Apple’s difficulties in delivering AI technology on time have become an embarrassment for the company. Earlier this month, Apple reached a $250 million settlement to settle a class-action lawsuit alleging false advertising about new Siri features. Some of this technology, promoted to consumers in 2024, has not yet reached the market.

© 2026 Bloomberg L.P.