Apple To 'Pay' OpenAI for ChatGPT Through Distribution, Not Cash (bloomberg.com) 40
Mark Gurman, reporting for Bloomberg: When Apple Chief Executive Officer Tim Cook and his top deputies this week unveiled a landmark arrangement with OpenAI to integrate ChatGPT into the iPhone, iPad and Mac, they were mum on the financial terms. Left unanswered on Monday: which company is paying the other as part of a tight collaboration that has potentially lasting monetary benefits for both. But, according to people briefed on the matter, the partnership isn't expected to generate meaningful revenue for either party -- at least at the outset.
The arrangement includes weaving ChatGPT, a digital assistant that responds in plain terms to information requests, into Apple's Siri and new writing tools. Apple isn't paying OpenAI as part of the partnership, said the people, who asked not to be identified because the deal terms are private. Instead, Apple believes pushing OpenAI's brand and technology to hundreds of millions of its devices is of equal or greater value than monetary payments, these people said.
The arrangement includes weaving ChatGPT, a digital assistant that responds in plain terms to information requests, into Apple's Siri and new writing tools. Apple isn't paying OpenAI as part of the partnership, said the people, who asked not to be identified because the deal terms are private. Instead, Apple believes pushing OpenAI's brand and technology to hundreds of millions of its devices is of equal or greater value than monetary payments, these people said.
apple played the “exposure” trick? (Score:4, Insightful)
looks like apple learned from influencers getting free food. well done, apple!
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I mean, if it works out and Apple tightly integrates this tech into their ecosystem, they might just outright buy OpenAI and make it a part of Apple, no?
Re: apple played the “exposure” trick? (Score:5, Interesting)
Influencers are selling their audience's eyeballs. Though it seems apple is giving openai something more valuable than that: Training data.
Though one question on my mind: How much of that is apple keeping to themselves to train their own AI models? No doubt all of it. Companies like openai should tread very carefully with apple. They have a history of using partnerships like this to brain rape the partner company, then poach a few of it's employees, and in some cases simply steal it's intellectual property (e.g. Masimo.)
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Like Microsoft already has? MS has already poached half of OAIs brains trust and almost managed to aquire Sam Altman during that ridiculous board coup attempt.
OpenAI is a babe in the woods in this playing field. Its going to get eaten alive, sooner rather than later.
Re: apple played the “exposure” trick (Score:2)
They already have a history of it.
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Looks like Sam is desperate to get exposure and is ready to throw anything at the wall to show that this "open" "AI" can stick somewhere.
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I mean, we roll our eyes at people asking to "pay" with exposure because the people who asked to do that rarely have enough influence to warrant attention.
But Apple? Google is literally paying billions of dollars per year for the right to be the default search in Safari on iOS. Microsoft offered billions of dollars as well. That real estate is worth money, and in my recollection, this is the first system-wide integration Apple has done with a third-party in nearly a decade, ever since they stripped out the
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For this arrangement to make any sense, OpenAI needs to benefit from it somehow and Apple has already said that they're not using input from users for training data. I could picture maybe "exposure" being worth it if there are no costs to OpenAI. Meaning that the model is running on Apple servers, or locally.
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What's the cost to acquire a customer? Maybe they're seeing a high enough conversion rate on people who try their product to feel confident that if they put it in front of millions of people, those freely-provided requests will convert enough people to make it worth their while. Keep in mind as well that Apple said that paid ChatGPT accounts will be able to access for-pay features via this integration, which I assume is a concession on Apple's part to give OpenAI an avenue for capitalizing on the exposure.
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Influenza: What do I get when I order another drink?
Bartender: A larger bill.
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This is especially silly since OpenAI isn't even getting real exposure. Sure, that is what is being used, but to the user they are using "Apple Intelligence". They aren't even branding is as "Apple Intelligence with Open AI" or anything like that. So the average user is going to have no idea OpenAI is what is actually giving them the results and think it is another Apple app.
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Do you think Sam Altman is stupid enough to enter into an agreement with Apple that has no value for OpenAI?
Clout and Courage (Score:3, Interesting)
It takes Clout to push ChatGPT on iPhones for free. But Apple once again showed it Courage, this time by selling out its users to OpenAI.
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Makes sense (Score:5, Funny)
These companies are just doing some forward thinking: In the upcoming world where AI provides everything and humans no longer do work, there will be no need for cash.
Market abuse (Score:2)
This is monopolistic behavior. The long time dominant phone vendor forces a newcomer to accept a deal that would not yield them any money, just "exposure". As if OpenAI needs more name recognition. This is unfair towards other phone vendors as they would need to pay. Eg Motorola would never be able to get OpenAI for free on it phones.
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Still, Motorola may be able to get another "AI" for free on their phones. Maybe one made in China (Motorola is a subsidiary of Lenovo).
PS: my phone is a Motorola, I like it and have no need for "AI" in my pocket.
Re: Market abuse (Score:2)
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Hmm...lessee...Apple has what, maybe 30% or less of world market for cell phones?
They have maybe 58% in the US?
So...did I miss it when Webster re-defined the word "monopoly"
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No... it is not free. This is a legitimate exchange of value. There's a reason that contract law says "consideration" and not "monetary value". Both sides are profiting - you just don't measure it in units of currency.
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Eg Motorola would never be able to get OpenAI for free on it phones.
So what?
OpenAI is not under any obligation to give everyone the exact same deal. There is no licensing authority that requires or mandates F/RAND terms. Apple brought value that Motorola can't - instantly adding several hundred million users with a finger snap. If you think OpenAI didn't see the value there and didn't wholeheartedly agree to the terms, then you don't know how this works.
Apple wanted OpenAI for their offerings, because then Apple doesn't need to spend hundreds of millions of dollars to fa
Not good for consumers (Score:4, Interesting)
It's chilling how AI is being shoehorned into everything. Bing is an absolute disaster and I bet Apple will be the damned same. And Google. And Amazon. And every fly by night service that doesn't want to pay money for actual staff.
Apple's AI will probably start off moderately useful. It'll be the personal organiser and doing some basic interactions with the user. But over time, Apple will be selling spots to 3rd parties to completely integrate with it. Somebody will want to order a pizza and some food delivery service will pay millions so that the pizza is ordered, billed for via Apple pay and delivered via them with a simple conversation - "hey do you want to order a large pepperoni like last time?". Or maybe it's coming up to holiday season and it'll ask if someone wants suggestions for trips that just so happen to use a particular reservation system. And so on. The AI will become a way to seamlessly extract money from people's wallets while denying them choice and value. It's going to be insidious and anticompetitive in the extreme.
More enlightened jurisdictions should probably look at all the ways that AI can seriously impact on competition, inequality, privacy and update their laws accordingly.
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It's chilling how AI is being shoehorned into everything. Bing is an absolute disaster and I bet Apple will be the damned same. And Google. And Amazon. And every fly by night service that doesn't want to pay money for actual staff.
Apple's AI will probably start off moderately useful. It'll be the personal organiser and doing some basic interactions with the user. But over time, Apple will be selling spots to 3rd parties to completely integrate with it. Somebody will want to order a pizza and some food delivery service will pay millions so that the pizza is ordered, billed for via Apple pay and delivered via them with a simple conversation - "hey do you want to order a large pepperoni like last time?". Or maybe it's coming up to holiday season and it'll ask if someone wants suggestions for trips that just so happen to use a particular reservation system. And so on. The AI will become a way to seamlessly extract money from people's wallets while denying them choice and value. It's going to be insidious and anticompetitive in the extreme.
More enlightened jurisdictions should probably look at all the ways that AI can seriously impact on competition, inequality, privacy and update their laws accordingly.
While you bring up good points, I think the bigger fear up-front should be, "What is OpenAI getting out of this aside from 'exposure?'" And the answer is? User Data. LOTS and LOTS of user data. Think about how much data is on your phone to begin with. And Apple's little "ask app not to track" question is even worded in such a way that, if the app happens to side-step their attempt to wall them off, oh well, not their problem. So whatever OpenAI nonsense is going on in the background, you can be assured that
Is that Apple talk for "exposure"? (Score:1)
You know, people die from exposure.
i thought i read about (Score:2)
Proper terminology (Score:3)
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No mod points today, but you have it in one.
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90% of the system is entirely with Apple's own LLM, which isn't related to OpenAI, and processed on device or publicly verifiable servers.
... or god knows where. Insofar as data intake, keylogger collects and retains less data.
OpenAI/ChatGPT isn't integrated into the OS (Score:1)
Ads incoming (Score:2)