Apple is reportedly set to pay Google billions to power its new AI features, but the partnership only happened after OpenAI turned down the offer. The ChatGPT creator reportedly walked away from the deal to focus on building its own competing device.
OpenAI said "no thanks" to Apple
We already knew that Apple tapped Google to power some of the heavy-lifting AI features on the iPhone, but new details have surfaced about how—and why—this deal went down. According to a new report (paywalled), this wasn't just Apple picking a favorite; it was also about who said "no." It turns out, OpenAI decided against becoming Apple’s main AI provider back in the autumn of last year.
Why walk away from the iPhone? The report claims OpenAI didn't want to just be a background player powering Apple's products. Instead, the company wants to focus on beating tech giants by building its own AI hardware. It definitely doesn't help that former Apple design legend Jony Ive is working with OpenAI on that very hardware, making the two companies more like rivals than partners.
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Because of this, Apple pivoted to Google, and it is going to cost them. The deal is structured as a cloud computing contract where Apple will likely pay Google several billion dollars over time to use its Gemini models.
Why the "billions" price tag matters
Turns out, OpenAI was the one that said 'no' to Apple. | Image credit — OpenAI
You might be wondering why Apple, the richest company in the world, is paying Google instead of just doing it all themselves. The simple answer is that building the "infrastructure" (the massive server farms that run AI) is incredibly expensive.
While Google, Microsoft, and Meta are spending hundreds of billions on these data centers, Apple is playing it safe. By "renting" Google’s powerful Gemini system for a few billion dollars, Apple avoids spending the estimated $90 billion Google is pouring into its own setup this year. It is the classic "rent vs. buy" debate, and right now, Apple thinks renting is the smarter play.
This echoes the massive deal the two tech giants already have for search, where Google pays Apple billions to be the default search engine on Safari. Now, money is flowing the other direction to ensure Siri actually works.
Do you think OpenAI made a mistake turning down Apple?
Yes, being on every iPhone is a huge missed opportunity.
38.1%
No, they should focus on their own hardware.
23.81%
I don't care, as long as Siri finally works.
28.57%
I prefer Google's Gemini anyway.
9.52%
A smart move for the iPhone
This feels like a win-win for Apple, even if it has to write a big check. By relying on Google’s established muscle, Apple doesn't have to risk its own cash building servers that might become obsolete in a few years. It lets Apple focus on what it does best: making the software look and feel good on your screen, while Google handles the hard math in the background.
As for OpenAI, turning down Apple is a massive gamble. Walking away from millions of iPhone users to build a mystery device is bold, but without the easy reach of the iOS ecosystem, they have an uphill battle. For now, I’m just happy Siri is getting a brain transplant, regardless of who is paying the bill.
Johanna 'Jojo the Techie' is a skilled mobile technology expert with over 15 years of hands-on experience, specializing in the Google ecosystem and Pixel devices. Known for her user-friendly approach, she leverages her vast tech support background to provide accessible and insightful coverage on latest technology trends. As a recognized thought leader and former member of #TeamPixel, Johanna ensures she stays at the forefront of Google services and products, making her a reliable source for all things Pixel and ChromeOS.
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