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Apple to 'pay' OpenAI for ChatGPT through distribution, not cash
- aurareturn 2y agoIt sort of makes sense but can be risky for OpenAI. I suspect that there are limits to this deal. For example, Apple will pay x amount if conversion rate is lower than x. 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?
- rpgbr 2y agoNot billion(s), because Apple Intelligence will only work on Apple Silicon (Mx) Mac and iPad and iPhone 15 Pro. Also, initially only in en_US devices. I’ve heard 100 mi figure, but can’t confirm/remember where.
- aurareturn 2y agoDo Siri queries not fall back to GPT4o in older devices? That seems weird because the inference is done in the cloud. 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.
- ben_w 2y agoSure, but they're not all en_US. I've got three on my desk right now*, and I'm in Germany. * 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
- aurareturn 2y agoApple Intelligence won't be limited to en_US right? It should be available world wide.
- ben_w 2y agoEventually, but not initially. I read this thread as if it was about the initial release, not the end-state. (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).
- d3m0t3p 2y agoDoes it need to be sold in the US or simply chaning os settings to use the en_US language is enough to activate this ? I'm in europe but working mostly in english and therfore I set my mac in english. Could I use Apple Intelligence ?
- tedmiston 2y agoPer Apple's site [1], it's just the language setting: "* 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." [1]: https://www.apple.com/apple-intelligence/ https://www.apple.com/apple-intelligence/
- jitl 2y agoEmail, etc, is all Apple inference, the presentation strongly implied that was on-device. The system always explicitly asks “Ok to send this query to OpenAI?” or user initiated request. 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.
- aurareturn 2y agoI'm pretty sure there is an option to ask ChatGPT to do inferencing for Email, etc. If I'm a paid ChatGPT user, I'd definitely choose GPT4 over Apple's models.
- slipheen 2y agoThere isn't anything like that currently - The integration that's been announced/shown is more like the current fallback in Siri of "Would you like me to Google that for you?"
- Aerbil313 2y agoNo, there is - from official Apple Intelligence announcement: > 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. https://www.apple.com/apple-intelligence/ https://www.apple.com/apple-intelligence/
- aurareturn 2y agoI watched WWDC and clearly, GPT4 is an option for inferencing email/text at the OS level. It's not just Siri fallback.
- blixt 2y agoThey’ve been explicit that only some knowledge related requests get sent to OpenAI, and only after the user has been asked “ok to send this to ChatGPT?” 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.
- quenix 2y agoThere are three models: 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.
- abhinavk 2y agoOther devices are not getting Apple Intelligence.
- ilogik 2y agoApple Intelligence doesn't use OpenAI
- cassianoleal 2y ago> As a result of the company's partnership with OpenAI, Apple Intelligence includes an integration with ChatGPT, allowing Siri to determine when to send certain complex user requests to ChatGPT. https://en.wikipedia.org/wiki/Apple_Intelligence https://en.wikipedia.org/wiki/Apple_Intelligence
- fckgw 2y agoOpenAI does not power Apple Intelligence. Apple Intelligence will pass of queries to OpenAI (with explicit user permission) in certain circumstances where it feels OpenAI would have a better answer.
- cassianoleal 2y ago> OpenAI does not power Apple Intelligence. 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.
- talldayo 2y ago
- threeseed 2y ago> Also, can OpenAI really handle that much more traffic Microsoft Azure is handling the traffic. And Apple would never enter into such a deal without proper capacity planning.
- belter 2y agoSatya Nadella subsidizing Apple AI. Did not see that one coming....
- threeseed 2y agoMicrosoft and Apple have had a great relationship for decades. And Satya would love nothing more than to drive Apple and Google apart.
- hello_kitty2 2y agoEverything is driven by money. Not relationships or random beliefs.
- aurareturn 2y agoI'm pretty sure Apple publicly said that they're also considering Google Gemini. 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.
- threeseed 2y agoNot sure why people keep seeing this situation through the App Store lens. 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.
- oldpersonintx 2y ago[dead]
- rickdeckard 2y agoOkay. 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...
- CuriouslyC 2y agoSam has gotten OpenAI well capitalized, and is playing a bit of a ponzi game. The big moves he has made are almost certainly not sustainable, and he's betting the farm that OpenAI can snowball into a monopoly position, bring costs way down and take over the world before investors start giving him the cold shoulder. OpenAI is far ahead of pretty much everyone but Meta in the race, but in the long run I think Mark and Yann can shut them down if they keep releasing free models.
- Havoc 2y agoThat’s not gonna work. The Chinese pricing is already 1/20th of oai. Not as good sure but that very much limits scope for a pure cost play. You can’t win that against state backed entities
- mensetmanusman 2y agohttps://apnews.com/article/china-chatbot-xi-jinping-thought-ai-chatgpt-68e6d58031f2fc55dc3c569dd1f0afb2 https://apnews.com/article/china-chatbot-xi-jinping-thought-... What will the Chinese ai be able to discuss?
- Havoc 2y agoThing is for 99% of usage cases this makes zero difference. Not saying it’s right but it’s largely irrelevant. And it certainly isn’t a moat for oai
- jgalt212 2y agoApple was being pressured by Wall Street to make move here, so you'd think they'd have the weak hand. However, by the time they moved, there were 3-4 vendors Apple could play off each other.
- JumpCrisscross 2y ago> Apple was being pressured by Wall Street No, they weren’t. To the extent there was financial pressure it was in iPhone sales.
- jgalt212 2y ago2 of the top 3 most valuable public companies have AI front and center. Where's your evidence?
- nojito 2y agoNo it was because of competition. https://appleinsider.com/articles/24/06/06/craig-federighi-ignited-apples-ai-efforts-after-using-microsofts-copilot https://appleinsider.com/articles/24/06/06/craig-federighi-i...
- sumedh 2y ago> there were 3-4 vendors Apple could play off each other. Which 3-4 vendors?
- aurareturn 2y agoChatGPT first. 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." https://www.macrumors.com/2024/06/11/apple-add-more-ai-models-in-future/ https://www.macrumors.com/2024/06/11/apple-add-more-ai-model... 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.
- dwighttk 2y agoGoogle pays Apple for distribution, so it sounds like Apple said “you pay for compute and we’ll give you the distribution for free”
- rickdeckard 2y agoDepends. How would that "free distribution" of "free compute" translate into profit for the company with the compute-bill? Only via conversion of users to paid OpenAI accounts?
- dwighttk 2y agoGood question.
- tedmiston 2y agoAt the bottom of the article, they allude to a future "AI App Store": > 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.
- steveBK123 2y agoI wonder if VCs will be the ones left holding the bag at the end of this AI cycle. 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.
- aurareturn 2y agoDid VCs end up holding the bag at the end of the mobile revolution hype cycle?
- steveBK123 2y agoWhat is different here is that the non-VC investors investments are being recycled back into their goods&services see: cloud credits, buying NVDA compute, etc. 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.
- aurareturn 2y agoDidn’t VC money mostly go to Google and FB ads in the past? Now they’re buying compute.
- nextworddev 2y agoThey are actually making money on their long NVDA position (which is the real game), and channeling VC investments into semi capex.
- taulien 2y agoFrom the article, it sounds like Apple aims to create an "AI App Store", where the users can choose the AI Supplier thmeselves instead of only beeing locked in to "Apple Intelligence". I think its a smart move to build an AI platform instead of beeing an AI supplier by themselves.
- jb1991 2y agoFYI, it's "being" not "beeing", unless you are a keeper of bees, perhaps, making honey.
- xyst 2y agoEnd state: OpenAI would probably love to see its subscription cost bundled into an Apple service plan [1] Pitch: “add Apple Intelligence+ which includes ChatGPT/Anthropic/Bard premium subscription for _only_ $99/mo!!1” [1] https://www.apple.com/apple-one/ https://www.apple.com/apple-one/
- alberth 2y agoI wonder how the EU will react to this, since they might view it as proof of an Apple monopoly who can dictate terms & pricing.
- ssahoo 2y agoGoldmanSachs regrets making a deal with Apple. Hopefully, OpenAI's is different. https://thehill.com/business/4332380-apple-to-end-goldman-sachs-credit-card-deal/ https://thehill.com/business/4332380-apple-to-end-goldman-sa...
- LordKeren 2y agoGoldman has killed off almost all of their consumer facing deals though, not just their apple contract
- consumer451 2y agoThis is tangential, but I have been wondering: is there anything to prevent Apple from reading both sides of the exchanges between the user and OpenAI, and training its own models based on that data?
- orf 2y agoYeah, 70% of their entire announcement was around the privacy controls.
- nextworddev 2y agoI wrote in "Apple Strategy in a Nutshell"[1] that this deal is awful for OpenAI. Not getting paid obviously makes it worse for them, and more favorable for Apple. [1] https://nextword.substack.com/p/apples-ai-strategy-in-a-nutshell https://nextword.substack.com/p/apples-ai-strategy-in-a-nuts...
- dangus 2y agoI think that what OpenAI is getting in return is their brand name being featured prominently in one of the top selling smartphone brands in the world. 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.
- Engineering-MD 2y agoI don’t think OpenAI company structure would allow an acquisition per se, although how much they bend the rules (such as with Microsoft) has not been tested
- talldayo 2y agoIt's so bizarrely awful for OpenAI that you almost start to wonder what the auxiliary value of a few million iPhone user's data is. 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.
- moogly 2y agoOne of the top richest companies in the world, who don't even know what to do with their money[1], don't want to pay for things. [1]: https://www.businessinsider.com/two-years-ago-steve-jobs-called-warren-buffett-and-asked-for-investment-advice-2012-2 https://www.businessinsider.com/two-years-ago-steve-jobs-cal...