The Deal That Wasn't

Back in June 2024, Apple and OpenAI announced a partnership at Apple's Worldwide Developers Conference. ChatGPT would be baked into Siri, Image Playground, and iOS's Visual Intelligence feature. Apple reportedly told OpenAI this was the opportunity of a lifetime — comparable to the multi-billion-dollar deal Apple cut with Google to be the default search engine in Safari.

OpenAI bought it. They shouldn't have.

According to Bloomberg's Mark Gurman — who broke this story — the integration has been a disaster for OpenAI. Revenue from the tie-up is "nowhere close" to projections. Internal OpenAI studies show users overwhelmingly prefer the standalone ChatGPT app over the buried iOS version. Executives describe the deal as a flat-out "failure."

How Bad Is the Integration?

Pretty bad. To get ChatGPT results through Siri, users have to specifically say the word "ChatGPT" in their prompt. No shortcut. No smart routing. Just a manual override that most iPhone users don't even know exists.

When ChatGPT does respond through Siri, according to MacRumors, the answers are crammed into "limited interface windows" — a stripped-down experience compared to the full app. OpenAI believes Apple never made a genuine effort to surface the feature.

One unnamed OpenAI executive told Bloomberg: "They basically said, 'OpenAI needs to take a leap of faith and trust us.'" The executive's follow-up: "We have done everything from a product perspective. They have not, and worse, they haven't even made an honest effort."

OpenAI's Legal Move

As reported by Bloomberg and confirmed by Reuters, OpenAI has hired an outside law firm to explore its options. The first likely step is a formal breach-of-contract notice — not an immediate lawsuit, but a legal shot across the bow.

Full litigation is possible. But according to TechCrunch, OpenAI is likely to hold off on escalating until after its ongoing trial with Elon Musk wraps up. One legal battle at a time.

OpenAI still says it wants to resolve this without going to court. But they're clearly done waiting.

Apple Isn't Innocent — But It Isn't Silent Either

Apple has its own complaints, according to iClarified. The company reportedly had privacy concerns about OpenAI's standards from the beginning — and went ahead with the deal anyway. That's on Apple.

Apple is also irritated about OpenAI's hardware ambitions. OpenAI acquired a consumer device startup co-founded by Jony Ive, Apple's legendary former design chief. Two other ex-Apple executives — Tang Tan and Evans Hankey — are leading the project. OpenAI has been aggressively recruiting Apple engineers, prompting Apple to issue rare six-figure retention bonuses to hold its hardware teams together.

So Apple is mad that OpenAI is trying to build an iPhone competitor. OpenAI is mad that Apple buried their product. Both are right. Neither is clean here.

The $1 Billion Google Gut Punch

Apple reportedly weighed a broader infrastructure deal with OpenAI for its AI backend. They went with Google instead — a $1 billion annual agreement to use Google Gemini technology across Apple's AI systems, according to iClarified.

OpenAI executives found out. They said they're no longer interested in expanding the relationship. Can't blame them.

Meanwhile, iOS 27 — set to be unveiled at WWDC on June 8 — will open Siri to Google Gemini and Anthropic's Claude through a new Extensions framework. OpenAI acknowledges the original deal was never exclusive, and MacRumors notes the new Extensions feature might actually help ChatGPT visibility. But the optics are brutal: Apple signed OpenAI, buried them, then paid Google a billion dollars a year for the real work.

Apple's Pattern — This Isn't New

Apple has a long, documented history of using partners as scaffolding and then kicking it out from under them.

Google Maps was central to the original iPhone's appeal. Apple ditched it in 2012 for Apple Maps — an embarrassment so bad that CEO Tim Cook issued a public apology, which almost never happens. Adobe, Google, and dozens of smaller developers have all felt the sting of building on a platform Apple controls completely.

If you build on Apple's land, you're a tenant. Apple is the landlord.

What Happened to iPhone Users

If you're an iPhone user who tried Apple Intelligence and found it underwhelming — this is why. Apple promised an AI-powered future and delivered a feature most users can't even find.

If OpenAI wins a legal fight or forces a renegotiation, ChatGPT could become genuinely useful on your iPhone. Or Apple doubles down on Gemini and cuts OpenAI out entirely.

The 350 million-plus iPhone users who were told AI was coming to their phones got a buried menu option instead.