Apple to 'pay' OpenAI for ChatGPT through distribution, not cash
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You're adding a few billion devices to do inference for if you're OpenAI without knowing the conversion rate from free to paid ChatGPT accounts from Apple users.
Also, can OpenAI really handle that much more traffic? Sometimes my paid ChatGPT account stalls or is slow even as of June 2024. Now they're going to add a few billion more users/devices at once. That's insane. How are they going to do this?
I’ve heard 100 mi figure, but can’t confirm/remember where.
1. Apple On-Device
2. Apple Server
3. GPT-4o
Apple Silicon/Mx, iPad, iPhone 15 Pro can access all three.
All other devices can still access Apple Server and GPT-4o. So, I'd expect the incompatible devices to actually hammer OpenAI more.
This is a strawman. No one on this thread said it does.
That said, it does - even if only partially, even if only with explicit permission, even if only in certain circumstances.
But 100m figure seems small. There are ~100m Apple Silicon Macs sold in the last 4 years. That's not including any M1+ iPads or iPhone 15 Pros.
I'm guessing maybe 250m? Still a ton of queries and usage. It's not just Siri. I believe features like optimize email response also uses GPT4o.
I think the Apple server inference is handling things like image generation where you need a beefy guy to get results quickly, and don’t need to transmit as much user context to service the request.
If I'm a paid ChatGPT user, I'd definitely choose GPT4 over Apple's models.
> With ChatGPT from OpenAI integrated into Siri and Writing Tools, you get even more expertise when it might be helpful for you — no need to jump between tools. Siri can tap into ChatGPT for certain requests, including questions about photos or documents. And with Compose in Writing Tools, you can create and illustrate original content from scratch.
If they allowed your private email contents or any other private context to leak outside their encrypted enclave (local or their new online hardware) then the entire set of privacy claims would go out the window.
* got one of my own right before a previous employer closed down and let us keep the work one, third one is from new employer
(Given how rapidly AI changes, anything more than a year away isn't easily planned for, even assuming no surprises on the anti-trust front for every Big Tech company nor any surprise new legal obligations for AI).
"* Apple Intelligence will be available in beta on iPhone 15 Pro, iPhone 15 Pro Max, and iPad and Mac with M1 and later, with Siri and device language set to U.S. English, as part of iOS 18, iPadOS 18, and macOS Sequoia this fall."
Microsoft Azure is handling the traffic.
And Apple would never enter into such a deal without proper capacity planning.
And Satya would love nothing more than to drive Apple and Google apart.
It's possible that Apple sees it as a future app store-like revenue. You can use any AI model you want, and if you want to subscribe to Gemini Pro or ChatGPT Plus, Apple takes 30%.
I was certain that Apple wants to create their own cutting edge LLM to compete with GPT4 or Gemini or Claude or Mixtral. But they've decided to instead, open up all their platforms to 3rd party models.
I suppose Apple may still want to create an Apple Intelligence Pro in the future but their models aren't leading at the moment.
Apple has had countless partnerships over the years eg. Foursquare, Google, Sensis that don't require a 15/30% commission.
It doesn't even make sense how or why they would implement an IAP flow directly into the OS.
You have hyperscalers "investing" in AI startups with compute credits, Nvidia "investing" in AI startups (who spend most of it on buying/renting their GPUs) and now this Apple deal.
I don't think we had a similar pattern in the mobile era. Did Apple ever invest in an app in exchange for App Store fee credits or some dubious scrip like that? I don't think so.
Now they’re buying compute.
Many comments in this thread are conflating Apple's own models and the name "Apple Intelligence" when the latter is the overarching platform.
Pitch: “add Apple Intelligence+ which includes ChatGPT/Anthropic/Bard premium subscription for _only_ $99/mo!!1”
[1]: https://www.businessinsider.com/two-years-ago-steve-jobs-cal...
[1] https://nextword.substack.com/p/apples-ai-strategy-in-a-nuts...
The other wildcard here is that OpenAI will likely exit in some way, most likely by acquisition. Who knows, maybe Apple would buy them.
If I were to defend OpenAI's decision to work with Apple, I would say that Apple's ability to do gap analysis won't necessarily help them catch up with OpenAI's capabilities. If this was the case, Apple would have figured out how to make a better modem than Qualcomm by now.
But as Scarlett Johansson taught us; OpenAI will always ask first. And then they will do whatever they want anyways, regardless of what you respond with.
No, they weren’t. To the extent there was financial pressure it was in iPhone sales.
https://appleinsider.com/articles/24/06/06/craig-federighi-i...
Which 3-4 vendors?
In conversation with reporters after the WWDC keynote, Apple's senior VP of software engineering Craig Federighi revealed that as Apple Intelligence evolves, the company eventually wants to give its users a choice between different AI models, and suggested that Google Gemini could be an option in the future.
"We think ultimately people are going to have a preference for certain models they want to use, maybe one that's great for creative writing or one that they prefer for coding," said Federighi. "Maybe Google Gemini in the future. I mean, nothing to announce right now, but that's our direction."
I suppose they will do the app-store financial model. They take 30% cut.
Some possible vendors: Google Gemini, Anthroic Claude, Mixtral, and other Chinese vendors in China market.
Because the Western vendors are banned in China, and Apple sells a lot of iPhones in China.
And even in a Western market, you might have Chinese immigrants choosing the Chinese vendor. That's probably not enough to justify the integration in and of itself, but if you already have to do it for the Chinese market, why not offer it in the West too?
Who says they couldn't? I was talking about the reverse not being allowed.
Only via conversion of users to paid OpenAI accounts?
> Eventually, Apple aims to make money from AI by striking revenue-sharing agreements whereby it gets a cut from AI partners that monetize results in chatbots on Apple platforms, according to the people. The company believes that AI could chip away at the billions of dollars it gets from its Google search deal because users will favor chatbots and other tools over search engines. Apple will need to craft new arrangements that make up for the shortfall.
Still curious if Apple "at least" has to pay the cloud-compute for the "free" OpenAI services they use (with OpenAI just licensing them their product for free) or if Apple really gets free AI-features AND 30% RevShare from handling sales of Premium OpenAI accounts...
I can't imagine that the profit of sold Premium subscriptions for OpenAI is sufficient to pay for the infrastructure hundreds of million iPhone users will consume using the free account.
Moreover, with Apple obviously executing their usual playbook, being the gatekeeper and total owner of all statistics, then slowly diverting traffic to their own products and cutting out the supplier...
What will the Chinese ai be able to discuss?
Not saying it’s right but it’s largely irrelevant. And it certainly isn’t a moat for oai
a) Microsoft pays for compute. OpenAI never intended to run their own cloud.
b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation.
c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI.
No, Microsoft INVESTED in OpenAI and in exchange became OpenAI's exclusive cloud provider. That doesn't mean they pay for the compute of all customers.
> b) Apple's 15%/30% is a "cost of channel" for developers. It is the fee they pay to get free users delivered to their app. And the decision to do this is purely a business one that can be changed at will and does not apply at all to this situation.
Not sure what you meant to say here. Purchasing of OpenAI "premium" would be handled via Apple's payment platform, for which Apple will likely take a cut. Regardless, OpenAI's gamble would be to onboard ~100M iPhone users under a "free" tier in a single rollout step, in hopes that the conversion-rate to an OpenAI premium will be high enough to offset the (infrastructure!) cost of serving all those users for free
> c) Calling Apple a gatekeeper for implementing additional features to their OS is odd to the say the least. They have made it clear during the keynote/WWDC presentations that they plan to add additional providers than OpenAI.
Apple is the gatekeeper because they are in control of the decision to offload AI-tasks to a 3rd party service or do them "in-house" (on-device/Apple-cloud), This doesn't change regardless whether they stated this upfront at the keynote/WWDC or not.
Because of this structure, Apple is are aware of every single AI-task that is to be done and will use this information to influence their in-house roadmap (a natural decision, because on-device is better than cloud, and Apple-cloud is better because <insert tech of Apple cloud here>).
At some point in the future, the user will be able to select WHICH 3rd party he wants to use, but so far I don't see any indication that Apple considers themselves as a 3rd party.
And even if they would, they hold more information than all other providers because they FIRST decide whether a task can be handled on-device or not.
A picture is personal data. Information about the content of that picture anonymized in a way that the user/subject cannot be identified, is not personal data anymore.
A profile generated from all your usage-habits combined is not "personal data" anymore.
Not a popular statement, but I believe the main reason for Apple pushing on-device ML-models is to extract non-personal information from its devices without the need for the "personal information" to be seen by Apple. There's even a paper on that [1]
Compute and storage is paid by the user, only the extracted data is delivered to Apple.
Beyond that, Apple's entire effort on privacy conveniently ensures that only they know everything about their users, and ensure that the customers don't (accidentally) tell someone else something about themselves.
[1] https://machinelearning.apple.com/research/learning-with-pri...
People want big data tech, most people think this is fine and not a privacy invasion. Apple’s approach to privacy is leagues better than e.g. Meta or Google. If you want no record, no accounts, no logs for anything ever, don’t buy a smartphone.