The details of Apple’s AI deal with OpenAI and ChatGPT

The partnership between Apple and OpenAI presents several potential benefits for both companies, even without direct financial transactions.

For Apple, integrating OpenAI's technology into its products can significantly enhance the user experience by offering advanced AI capabilities. This integration could lead to increased sales of Apple devices, as well as attracting new customers who value AI-powered features. Moreover, the partnership allows Apple to catch up with competitors like Microsoft and Google, who have already made significant progress in incorporating AI into their products and services.

On the other hand, partnering with Apple provides OpenAI with an unprecedented opportunity to expand its reach and user base. By making its AI technology available to millions of Apple users, OpenAI can increase brand recognition and adoption of its services. This partnership also validates OpenAI's technology and can potentially attract more investors, partners, and customers.

Furthermore, the partnership aligns with OpenAI's mission to make advanced AI accessible to everyone3. By working with Apple, OpenAI can bring its AI technology to a broader audience, thus democratizing access to AI tools and their potential benefits.

In summary, the partnership between Apple and OpenAI offers mutual benefits in terms of enhanced product offerings, increased reach, and alignment with their respective goals and missions, without the need for direct financial transactions between the two companies.

Apple's new AI features, collectively known as Apple Intelligence, are designed to significantly enhance the user experience on iPhones, iPads, and Macs. These features harness the power of Apple silicon to understand and create language and images, take action across apps, and draw from personal context to simplify and accelerate everyday tasks4. With Private Cloud Compute, Apple sets a new standard for privacy in AI.

The introduction of these AI features might play a key role in Apple's upgrade-your-iPhone strategy. The company used its annual developer conference to announce Apple Intelligence, a suite of new AI features that, like other generative AI tools, are trained on massive datasets. Apple's approach is an additive one, relying on the influence and footprint of its existing apps rather than spinning up a new chatbot or search engine that spits out humanlike responses.

Once Apple Intelligence rolls out to iPhones, Macs, and iPads later this year, it's supposed to turn sketches into images, sort through photos and videos, rewrite emails, change the tone of messages, and allow the voice assistant Siri to tap into different apps to string together smarter responses.

However, there's a catch: these AI features won't work on old iPhones. Apple is limiting these AI features to the iPhone 15 Pro and Pro Max, which run on Apple’s A17 Pro chip; the iPads Pro and Air, which run on Apple’s M1 chip or later versions; and various Mac computers that run on the M1 chip or later6. This limitation might be a technical requirement or a product-differentiation strategy, but it might be Apple's best shot at convincing customers to upgrade to newer iPhones this fall.

An iPhone powered by large language models and focused on new AI-personalization features "should change the growth trajectory of Cupertino–spur an AI-driven iPhone upgrade cycle starting with iPhone 16," tweeted Dan Ives, managing director of Wedbush Securities and a longtime Apple analyst.

So, the new AI features could influence consumer decisions to purchase new iPhones in several ways:

1. Enhanced User Experience: The new AI features can significantly enhance the user experience, making tasks easier and more efficient. This could attract users who value a seamless, intelligent interface.

2. Innovative Capabilities: Features like turning sketches into images, sorting through photos and videos, rewriting emails, and changing the tone of messages can be appealing to users looking for innovative capabilities in their devices.

3. Privacy Focus: Apple's focus on privacy in AI, with features like Private Cloud Compute, could attract users who are concerned about data privacy4.

4. Hardware Upgrade: The limitation of these AI features to the newer models like iPhone 15 Pro and Pro Max could compel users to upgrade their devices to experience these features5.

5. Competitive Edge: In the competitive smartphone market, these new AI features could give Apple an edge over its competitors, attracting both existing and new users.

However, it's important to note that the impact of these AI features on consumer decisions will depend on various factors, including user needs, preferences, and the perceived value of these features.