Apple Takes Its 30% Bite From AI Innovation, Costing OpenAI Millions

Apple Takes Its 30% Bite From AI Innovation, Costing OpenAI Millions

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The AI revolution is in full swing, with OpenAI’s ChatGPT app dazzling the crowd. But amidst the cheers and applause, a familiar tech giant quietly rakes in the profits. While Apple may not stand at the forefront of generative AI, it still has a way to take a sizeable bite of the AI pie.

OpenAI’s venture shifted into high gear with the unveiling of an iPhone app for ChatGPT, which swiftly catapulted to the top of the App Store charts. Within days, the app claimed the title of number one in the free apps category, an accomplishment further highlighted by Apple’s endorsement as a “must-have” app under its “Essentials” category.

Enter Apple’s infamous 30% cut, known among tech insiders as the “Apple Tax,” on all new subscriptions made through iOS. The fee has drawn a fair share of criticism, especially from crypto users for whom in-app NFT purchases would become an expensive affair. Still, OpenAI chose to abide by Apple’s terms, opting for its native in-app purchasing system instead of setting up a separate subscription website.

This means that for every ChatGPT Plus subscription, Apple takes $6 of the $20 paid monthly by iOS users.

Tim Cook, Apple’s CEO, has voiced his commitment to integrating AI into Apple’s products. Yet this does not mean a shift away from the pursuit of profit. Even as data privacy concerns bubble under the surface, ChatGPT remains available on the App Store, significantly bolstering Apple’s service revenue, which reached a record $20.8 billion in the most recent quarter.

Apple’s 30% fee, however, has landed the company in hot water. The U.S. federal appeals court ruled that Apple breached California’s Unfair Competition Law by forbidding alternative payment methods. Despite this, OpenAI appears to be sticking with Apple’s built-in payment processor, likely favoring its seamless user experience.

As reported by Decrypt, Apple recently emerged victorious in an antitrust case filed by Epic Games, but it’s now on the verge of permitting third-party app stores in the European Union due to new legislation aimed at leveling the field for developers.

As this narrative unfolds, it underscores the intricate dance between AI pioneers, big tech, and regulators. For now, Apple seems to have the upper hand, leveraging the innovative work of others to line its own pockets, even while being tangled in controversies. 

One thing’s for sure: the AI revolution is just getting started, and so is the scramble to capitalize on it.

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