OpenAI Is Preparing to Sue Apple — The AI Partnership That Was Supposed to Be Worth Billions Has Collapsed

The AI world’s most important consumer partnership is unravelling — and it’s heading to court

OpenAI is preparing legal action against Apple over their two-year-old ChatGPT-Siri partnership, claiming the deal that was supposed to generate billions in subscription revenue has produced a fraction of what was promised. According to a Bloomberg report published May 14, OpenAI lawyers are working with an outside firm “on a range of options that could be formally executed in the near future,” including a potential breach-of-contract notice.

This isn’t a minor contractual spat. This is the partnership that defined “Apple Intelligence” — the branding Apple used to sell its entire AI strategy to the world. And it’s collapsing in public view.

What went wrong: “Take a leap of faith”

The deal, struck in June 2024, wove ChatGPT into Siri, Writing Tools, Visual Intelligence, and Image Playground across iOS. Apple got an AI story to tell; OpenAI got what it believed would be prime placement inside an ecosystem of more than a billion active devices.

Apple reportedly characterised the opportunity as comparable to its Google Search deal in Safari — a partnership that generates tens of billions of dollars annually for both sides. That comparison has proved spectacularly wrong.

An OpenAI executive, speaking to Bloomberg anonymously, said: “We have done everything from a product perspective. They have not, and worse, they haven’t even made an honest effort.”

Another executive said Apple told OpenAI to “take a leap of faith and trust us” — without sharing specifics about the product implementation. That leap, OpenAI now believes, landed on rubble.

The core grievances:

Buried integration: Users must explicitly say “ChatGPT” to Siri to trigger OpenAI’s models. Responses appear in constrained windows with limited information.
No subscription lift: OpenAI believed the deal could generate billions per year in paid subscriptions. It “hasn’t come close to happening,” per Bloomberg.
Brand damage: OpenAI’s own user studies found Apple customers overwhelmingly prefer the standalone ChatGPT app. The limited Siri integration may have made ChatGPT look worse than it is.
No money from Apple: Apple isn’t paying OpenAI for use of its technology. The only revenue comes from Apple’s cut of subscriptions generated through iOS — subscriptions that aren’t materialising.

Apple is already moving on — to Google and Anthropic

The partnership’s collapse coincides with Apple preparing to announce a next-generation Siri powered by Google Gemini, reportedly at a cost of around $1 billion per year. iOS 27 will also let users integrate with other AI models, including Anthropic’s Claude.

OpenAI says Apple opening the platform to rivals “isn’t driving the company’s legal action since the partnership wasn’t meant to be exclusive from the start.” But the optics are brutal: Apple is spending billions on Google while paying OpenAI nothing, and OpenAI is the one threatening to sue.

Why it matters: The AI distribution landscape just got reshaped. If OpenAI can’t get distribution through Apple — the world’s most valuable consumer platform — its path to consumer-scale revenue narrows significantly. Meanwhile, Apple is treating AI models as interchangeable commodities, playing Google, OpenAI, and Anthropic against each other. The balance of power in the AI platform wars just shifted from AI companies to platform owners.

The Jony Ive factor adds a hardware rivalry

As if a legal fight wasn’t enough, the two companies are now also hardware rivals. OpenAI’s $6.5 billion acquisition of io — the device startup co-founded by former Apple design chief Jony Ive — has created a direct competitive threat to the iPhone. The business is now run by former Apple executives Tang Tan and Evans Hankey, and Apple executives have been “fuming for more than a year” over OpenAI’s aggressive recruitment of Apple hardware engineers with stock packages worth millions more than Apple provides.

So: OpenAI is preparing to sue its biggest distribution partner while simultaneously building a device to replace that partner’s flagship product. What could go wrong?

The timing is no accident

Any legal action is unlikely before the conclusion of the Musk v. OpenAI trial — a federal case with potential damages of $150 billion that’s already consuming OpenAI’s legal bandwidth. Bloomberg’s sources say OpenAI is managing its exposure carefully, avoiding a second legal front while the first remains unresolved.

But the clock is ticking. WWDC starts June 8, where Apple is expected to announce the Gemini-powered Siri and further diminish OpenAI’s role. Every day that passes without resolution is a day Apple consolidates its AI strategy around everyone except OpenAI.

🔍 THE BOTTOM LINE

The partnership that was supposed to be the Google Search deal of the AI era — a multi-billion-dollar distribution agreement between the world’s most valuable company and its most famous AI startup — has produced a fraction of its promised value. OpenAI took a leap of faith and landed on a platform that buried its product behind friction. Apple got a PR story, paid nothing, and is now spending billions with Google instead. The lesson? In the AI platform wars, the platform always wins. And OpenAI is about to learn that the hard way — in court.

❓ Frequently Asked Questions

Q: What does this mean for NZ users? iPhone users in NZ won’t notice any immediate changes. ChatGPT integration in Siri still works. But if OpenAI pulls out or Apple shifts to Gemini as the default, you might see a different AI experience on your next iOS update.

Q: Can OpenAI actually win a lawsuit against Apple? That depends entirely on what’s in the contract. If Apple made specific promises about placement, promotion, or distribution that aren’t in the written agreement, OpenAI’s case is weak. But breach-of-contract claims around “good faith” obligations can succeed — especially if OpenAI can show Apple’s implementation was designed to fail.

Q: What should I do? Nothing right now. No lawsuit has been filed. But if you’re choosing between ChatGPT Plus and other AI subscriptions, know that the distribution landscape may shift significantly in the next 6-12 months.