When Apple and OpenAI announced their partnership in June 2024, it was framed as one of the more consequential alignments in recent tech history. Less than two years later, OpenAI’s lawyers are working with an outside legal firm on options that include sending Apple a formal notice alleging breach of contract. No lawsuit has been filed, and OpenAI has said it would prefer to settle the matter without litigation. But the preparations are real, and the discussions are ongoing.
Apple shares fell as much as 1.2% to $295.38 on Thursday as the news circulated.
A deal built on subscriptions that never came
The logic of the partnership was straightforward. OpenAI would embed ChatGPT into Apple’s software ecosystem and gain access to hundreds of millions of iPhone users. That access was expected to translate into billions of dollars annually in new subscriptions, establishing the chatbot as the default AI tool on mobile. That revenue has not materialized.
The integration as it currently exists requires users to specifically invoke ChatGPT by name when issuing a command through Siri. That friction point has suppressed organic discovery and kept usage low. Responses delivered through the interface appear in a constrained window that falls well short of the full ChatGPT experience available through the standalone app. User studies conducted by OpenAI found that people are far more likely to open the standalone app than to access the technology through Siri or other Apple services. OpenAI also concluded that the implementation has actively hurt its brand perception among consumers.
How Apple fell short of what OpenAI expected
OpenAI entered the deal expecting deeper integration across Apple’s apps, prominent placement within Siri, and a meaningful promotional push across the iPhone, iPad, and Mac ecosystem. Renegotiation attempts have stalled.
Apple has raised concerns about OpenAI’s approach to user privacy. A separate tension emerged after OpenAI acquired a next-generation devices startup co-founded by former Apple design chief Jony Ive, a move that positioned OpenAI as a potential hardware competitor. Apple executives have also been frustrated for more than a year over OpenAI’s recruitment of engineers from Apple’s hardware team, with the AI company offering stock-based compensation packages worth significantly more than Apple’s own offers.
Apple’s own AI stumbles complicate the picture
Apple’s standing in this dispute is complicated by its own record in artificial intelligence. The company moved to integrate ChatGPT in 2024 in part because its internal generative AI features were not ready for release. Earlier this month, Apple settled a class action lawsuit for $250 million over allegations that it had falsely advertised Siri features in 2024 that have still not fully reached consumers.
The company is now moving to reduce its dependence on OpenAI entirely. Apple is opening its platforms to competing AI providers later this year, with integrations being tested for both Claude and Google Gemini. A redesigned Siri incorporating those expanded capabilities is expected to be announced at Apple’s Worldwide Developers Conference on June 8 as part of iOS 27. Apple is currently paying Google roughly $1 billion annually for access to its AI technology.
What happens next for OpenAI and Apple
Any formal legal action from OpenAI is unlikely before the conclusion of the Elon Musk trial, a separate legal matter the company is currently managing. The broader trajectory, however, is not ambiguous. A partnership that was once compared favorably to Apple’s multibillion-dollar search agreement with Google in Safari has instead produced mutual frustration, legal preparation, and strategic repositioning on both sides. Neither company appears to be working toward repair.
