Microsoft Asked For A Cut From Future OpenAI Profits As Apple Plans To Integrate AI Into iOS 18

Microsoft and OpenAI have a close relationship, and it appears that the latter is now planning to team up with the iPhone maker. Apple has been working to build a relationship with OpenAI and Google for their generative AI technology, which could potentially be part of the company’s next big iOS 18 update. However, the idea of Apple and OpenAI working together has Microsoft worried.

Apple and OpenAI’s deal has Microsoft worried about excessive demand for servers, leading it to ask for a cut

Ever since the dawn of generative AI technology, Apple has been working to bring its own product to light. While it might be late to the game, the company could lead going forward. Plenty of reports suggest how Apple plans to make AI its next big thing, and it mainly depends on how the company aims to use the technology. The Information claims that Apple and OpenAI have been in talks since mid-2023, and a possible deal could have been struck, as no official details are available.

In about ten days, Apple will showcase what it has been cooking for the past year. The company has been working on its own large language models and requesting existing contenders in the industry to bring their technology to the table. A month or so ago, it was reported that Apple was in talks with OpenAI, Google, and Baidu. It is now rumored that OpenAI will bring its technology to the iPhone through various integrations in iOS 18.

“In those tests, Apple engineers connected ChatGPT to Siri, creating impressive demonstrations of Siri handling more complex queries than usual, including by better understanding the context of what users were saying.”

The exact GPT models being explored by Apple are unknown at this stage, but sources familiar with the matter have mentioned that the company plans to make Siri smarter. While it will be beneficial for the end user, Microsoft might not be too happy about the deal. This is because Microsoft also holds an active deal with OpenAI and the product is part of the company’s newly announced Copilot+PCs.

To address these concerns, OpenAI CEO Sam Altman met with Microsoft’s Satya Nadella. Microsoft is concerned that demand for servers will skyrocket after Apple introduces the AI features on iPhones and iPads. Additionally, Microsoft asked for a cut from the profits that OpenAI would receive once its partnership with Apple goes live. The reason why Microsoft demanded a cut is because it invested $13 billion in OpenAI. While it will be profitable for Microsoft, Apple could gain the upper hand in the features it could have with OpenAI’s AI technology at its disposal.