(Bloomberg) - Apple Inc.’s two-year-old partnership with OpenAI has become strained, according to people familiar with the matter, with the AI startup failing to see the expected benefits from the deal and now preparing possible legal action.
OpenAI lawyers are actively working with an outside legal firm on a range of options that could be formally executed in the near future, said the people, who asked not to be identified because the deliberations are private.
That could include sending the iPhone maker a notice alleging breach of contract without necessarily filing a full lawsuit at the outset, according to the people. OpenAI enlisted the outside firm in recent days to help with the situation.
OpenAI believed that the companies’ partnership, which wove ChatGPT into Apple software, would coax more users into subscribing to the chatbot. It also expected deeper integration across more Apple apps and prime placement within the Siri assistant.
Instead, Apple’s use of OpenAI technology across its operating systems remains limited, and features can be hard to find.
“We have done everything from a product perspective,” said an OpenAI executive who asked not to be identified. “They have not, and worse, they haven’t even made an honest effort.”
Spokespeople for OpenAI and Apple declined to comment.
Apple shares slipped to a session low Thursday on the news, falling as much as 1.2% to $295.38. The stock was up 10% this year through Wednesday’s close, roughly in line with the S&P 500.
For OpenAI, the rift adds to a splintering of relationships in the tech world. The company is waging a legal battle with Elon Musk, one of its co-founders, and recently renegotiated an exclusive deal with Microsoft Corp., its biggest backer. Amazon.com Inc., meanwhile, has strengthened ties with OpenAI rival Anthropic PBC.
Apple has had its own concerns about OpenAI, including whether the company does enough to protect user privacy. And a recent push by the startup to make devices — an effort overseen by former Apple executives — has rankled the iPhone maker.
Any legal move by OpenAI likely wouldn’t come until after the conclusion of the Musk trial, according to the people. No final decisions have been made, and OpenAI still hopes to resolve its issues with Apple outside of court.
The two Silicon Valley companies once seemed poised for a broad strategic relationship. In June 2024, OpenAI Chief Executive Officer Sam Altman sat in the audience at Apple’s campus when the deal was announced — with software head Craig Federighi referring to the startup as the “pioneer and market leader” in artificial intelligence.
The arrangement let users access ChatGPT results within Siri and tap the AI technology to generate text and analyze surrounding objects via the iPhone’s Visual Intelligence feature. The partnership later expanded, with Apple adding ChatGPT as an option for creating images in its Image Playground app and analyzing on-screen content.
As part of the agreement, iPhone users got a way to sign up for ChatGPT memberships directly from the iOS settings menu — with Apple taking a portion of the subscription revenue generated through its platforms.
OpenAI executives believed the arrangement could eventually become a major revenue stream as the company worked toward an initial public offering. Instead, the relationship has deteriorated, according to the people, and OpenAI’s attempts at renegotiating the deal have stalled.
Apple customers are overwhelmingly more likely to turn to the standalone ChatGPT app rather than accessing OpenAI’s technology through Siri and other Apple services, according to user studies conducted by the AI startup that were described by the people with knowledge of the matter.
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 in order to get results from OpenAI. Responses are also more constrained than those available through OpenAI’s standalone app: They appear in a small window, with limited information.
Moreover, OpenAI executives believe Apple hasn’t sufficiently promoted the integration across the iPhone, iPad and Mac ecosystem.
OpenAI initially believed the deal could generate billions of dollars per year in subscriptions — something that hasn’t come close to happening. It also now believes the Apple implementation has hurt OpenAI’s brand with customers.
“When we heard about this opportunity, it sounded amazing: being able to acquire a giant number of customers and have distribution in such a big mobile ecosystem,” said the OpenAI executive. At the time, though, Apple was unwilling to share exactly what the product would be, the person said.
“They basically said, ‘OpenAI needs to take a leap of faith and trust us,’” the executive said, adding that the deal ended up being a failure for the startup.
In the coming months, OpenAI is poised to lose its unique role within Apple software. The iPhone maker is opening up its platforms to a slew of rival providers later this year, Bloomberg News has reported.
That means customers will be able to install a number of AI chatbots from the App Store and use them to field questions within Siri or to handle image and text generation.
Apple is testing integrations with both Anthropic’s Claude and Google Gemini as part of this push. A revamped Siri with this capability — part of the iOS 27 operating system — is slated to be introduced at Apple’s Worldwide Developers Conference on June 8.
Since 2024, Claude and Gemini have become more formidable competitors to ChatGPT. Anthropic is in early talks to raise money at a valuation of more than $900 billion, Bloomberg News reported this week, a move that underscores the company’s rapid rise.
The OpenAI executive said that Apple’s embrace of other AI providers isn’t driving the company’s legal action since the partnership wasn’t meant to be exclusive from the start.
And the new integration system in iOS 27, known as Extensions, actually might better promote ChatGPT — even with the increased competition. In a new system search interface, users will be presented with an AI model picker, which would include both Siri and outside alternatives like OpenAI’s offering.
During initial discussions about a deal in 2024, Apple characterized the arrangement as being an opportunity on par with its deal with Google for search in the Safari browser, according to people familiar with the talks. That partnership brings in tens of billions of dollars in revenue for both sides annually.
The ChatGPT integration is separate from an effort to revamp Apple’s underlying AI models with technology from Google’s Gemini team. Apple struck that deal late last year after earlier weighing a broader arrangement with OpenAI.
OpenAI wasn’t 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 they can dictate terms,” the executive said. “We already took this leap of faith with you, and it didn’t work out well.”
Apple is paying Google roughly $1 billion annually to use its AI technology, Bloomberg reported last year. CEO Tim Cook said in February that Apple linked up with the company because it believed “Google’s AI technology would provide the most capable foundation” for its AI efforts.
At the same time, OpenAI has emerged as a potential Apple competitor in hardware. Last year, the AI company acquired a next-generation devices startup co-founded by former Apple design chief Jony Ive, creating a new source of tension. That business, run by ex-Apple executives Tang Tan and Evans Hankey, is now working to create an alternative to the iPhone and other devices.
Apple executives have been fuming for more than a year over the way OpenAI has recruited engineers from its hardware team, Bloomberg News has reported. To lure talent, the AI company has offered stock-based packages worth millions of dollars more than Apple provides.
Even back in 2024, Apple 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 features were still far from ready, according to people with knowledge of the decision.
Apple’s struggles to deliver AI technology on time became a black eye for the company. Earlier this month, Apple settled a class action lawsuit for $250 million that alleged it engaged in false advertising about its new Siri features. Some of that technology, marketed to consumers in 2024, has still yet to come to market.
By Mark Gurman
May 14, 2026
