The Apple and OpenAI partnership should make Google pretty mad, but it’s not for the reasons you think
At WWDC 2024, Apple unveiled Apple Intelligence. This is Apple’s take on AI and as per the rumors, the company announced a partnership with OpenAI. This is where OpenAI’s ChatGPT AI model will be used to power some AI features that Apple’s own tech cannot. But now details about the deal have leaked, courtesy of Mark Gurman at Bloomberg, and this partnership between Apple and OpenAI could be quite upsetting for Google.
It’s mutually beneficial
According to the report, Apple and OpenAI’s partnership doesn’t seem to involve money. Instead, Apple seems to think that it is a mutually beneficial deal where Apple can leverage OpenAI’s tech. Iin turn, Apple will “pay” OpenAI in exposure by giving them access to millions of iPhone users around the world.
Not to mention, Apple has had quite spectacular failures in the past when launching their own services. Having a third-party power some of the more complex requests could go a long way in regaining the trust of their customers.
Why Google could be upset
In addition to OpenAI, Apple also has a partnership with Google. This is where Google is reportedly paying Apple billions of dollars a year to remain the default search engine on Safari.
At first glance, it seems like it is a similarly mutually beneficial deal for both companies. Apple users will be able to access one of the best search engines in existence, and in turn, Google gets massive traffic from the millions of Apple users out there.
Since both companies benefit from this, should Google be required to pay Apple? In this case it’s different. Google benefits from the influx of users which in turn boosts its ad revenue. This means that Google actually derives a financial benefit from this deal, whereas Apple does not. This is why Google paying Apple a reported $20 billion a year makes sense.
Things could change
Prior to the official announcement at WWDC, there were rumors that Apple was in talks with both OpenAI and Google to form some kind of AI partnership. The announcement simply made it clear who “won”.
But this doesn’t mean things can’t change. During an interview at WWDC, Apple exec Craig Federighi revealed that the company is open to using other AI models. He specifically mentions Google Gemini and suggests that in the future, it is possible that Apple could adopt other models and let users choose which they want to use.
We’re not sure if that happens, will the developers and companies behind these models have to pay Apple to exist in their ecosystem. With there being millions, if not billions of Apple products in the wild, having access to all this user data to train their AI could be extremely beneficial. These are benefits that could also potentially be monetized by Apple.
In any case, Google hasn’t really spoken publicly about the partnership between Apple and OpenAI, so it will be interesting to see how this plays out.