It Turns Out Apple Is Only Paying OpenAI in Exposure

We've heard that one before.

Money's Worth

You know how creatives frequently complain about cheapskate clients offering to pay them "in exposure" instead of actual money?

Sounds like OpenAI knows exactly what that feels like. When Apple announced its partnership with OpenAI last week, it certainly sounded like it could have been yet another blockbuster deal for the ChatGPT developer, who has already courted billions of dollars from its big daddy backer, Microsoft.

But as Bloomberg reports, no hard cash changed hands as part of the deal, and neither party expects a direct boost in revenue. Apple isn't paying OpenAI, but the thinking goes that it's more than making up for this by giving the startup tons of exposure, according to Bloomberg's sources, as it thrusts ChatGPT into the hands of Apple's hundreds of millions of devices and customers.

In return, Apple — notably absent for so long in the generative AI race — can finally get a foothold in the field and get chatbot-crazed customers to use their devices more. And to inject some speculation on our part, perhaps Apple hopes to piggyback off ChatGPT's household status to vicariously legitimize its new in-house AI effort, "Apple Intelligence."

Fair Share

In the long run, both parties obviously hope the deal will yield some additional revenue, directly or indirectly. But before they can get there, there are still a few nagging questions.

AI demands ludicrous amounts of processing power, and so if OpenAI sees an influx of users and a boost in how much people use its chatbot, the more it'll have to shell out to use Microsoft's servers, where its chatbot is hosted.

Not all users will be freeloaders, however, and OpenAI will undoubtedly be banking on customers trying out its $20 per month "ChatGPT Plus" subscription plans and higher, which grant access to its latest large language model that features its controversial voice mode, as well as image generation via DALL·E, both big draws.

And there Apple stands to benefit, too. As Bloomberg notes, any subscription purchases made through the ChatGPT app will see a cut of the transaction go to the tech giant — as much as 30 percent.

In sum, both parties stand to reap rewards from their new partnership, even if they may not be tangible and come with expenses along the way. But the degree of benefit may be unbalanced.

You can imagine that Apple, the multi-trillion dollar kingpins of the tech industry, were in a better bargaining position, and there's maybe a chuckle to be had that with all its billions, it's only paying OpenAI in "exposure." If it was a deal between client and a freelance artist desperate for a breakthrough, it'd sound exploitative. Something tells us that OpenAI, whose valuation was last reported as being upwards of $80 billion, will be just fine, though.

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