OpenAI eyes Apple lawsuit in another toxic partnership

OpenAI is getting ready to take Apple (NASDAQ: AAPL) to court over their ChatGPT deal that went bad. The AI firm brought in an outside law firm to figure out what they can do.

They might send Apple a letter saying the company broke their contract, though a full court case might not happen right away, according to a Bloomberg report.

OpenAI probably would get done with Elon Musk’s trial mess before making any legal moves against Apple.

The partnership with Apple was announced at its big conference back in June 2024. Apple was to integrate ChatGPT into iPhones, where users could directly inquire through Siri and also use the camera to send pictures to ChatGPT for queries.

OpenAI wanted millions of new paying customers through the deal. But this partnership could not deliver what Altman expected.

OpenAI blamed Apple for the failure because it hid the ChatGPT features and made them too hard for people to find. Money from the deal came nowhere close. One OpenAI manager said Apple asked them to “take a leap of faith and trust us” but “it didn’t work out well.”

OpenAI is not the only one with concerns. Apple also worries how OpenAI deals with privacy.

Apple’s long history of dumping partners

This mess follows a pattern at Apple. The company has a long track record of working with big software firms and then pushing them out.

Google Maps was a key part of the first iPhone, but Apple dumped it in 2012 for its own maps app. That went so badly that CEO Tim Cook had to say sorry in public.

Google (NASDAQ: GOOG) and Apple started having problems after Google made Android phones in 2008, one year after the iPhone came out. Eric Schmidt, who ran Google back then, left Apple’s board in 2009 as the companies became rivals.

Steve Jobs refused to let Adobe’s Flash work on iPhones and iPads. He wrote a letter in 2010 explaining why, which basically killed Flash on phones.

Spotify spent years saying Apple used the App Store to hurt other music apps after Apple Music started in 2015.

European officials agreed and made Apple pay almost 1.8 billion euros in March 2024.

But sometimes, Apple can patch things up when there’s money involved.

Google is now helping Apple with AI after signing a deal in January. Google’s Gemini models will run the next version of Apple’s smart features. Apple is paying Google about $1 billion each year for this.

OpenAI restructures Microsoft deal

Just a month before, OpenAI changed its deal with Microsoft in April. The new setup puts a limit on how much money OpenAI has to share with Microsoft. OpenAI will keep paying Microsoft 20% of what it makes through 2030, but there’s now a cap on total payments. Reports say that cap is $38 billion.

Microsoft (NASDAQ: MSFT) put more than $13 billion into OpenAI starting in 2019. The new deal lets OpenAI work with other cloud companies like Amazon and Google, not just Microsoft. Microsoft can still use OpenAI’s technology through 2032, but other companies can use it too now.

OpenAI signed a huge deal with Amazon (NASDAQ: AMZN) in February. Amazon said it would put up to $50 billion into OpenAI and let the company use Amazon’s cloud services.

OpenAI is also making hardware

The company bought Jony Ive’s firm last May for $6.5 billion. Chris Lehane, who handles global affairs for OpenAI, said at a meeting in Davos that the first device should come out in the second half of 2026, directly entering Apple’s market.

He wouldn’t say what it looks like, but reports say it might be small with no screen, maybe something you wear.

Sam Altman said it will be simpler and calmer than a phone.

As reported by Cryptopolitan, OpenAI is facing another legal battle with an apparently unserious Musk, who did not show up in the closing arguments because of his visit to China. OpenAI has even said that Musk had been looking at memes once during a meeting.