00:00Apple took a bit of a turn when this news hit the wire, Mark.
00:03Give us the context. Bring us up to speed. What's happening exactly?
00:07Yeah, so two years ago, Apple and OpenAI announced a blockbuster partnership
00:12that would integrate ChatGPT into parts of the iPhone, the iPad, and the Mac experience.
00:17This was part of the new Siri and Apple intelligence that rolled out with iOS 18.
00:21But the implementation of the new ChatGPT features has actually been quite limited.
00:25It's in places like Image Playground, writing tools for writing generation and image generation.
00:31And you can ask Siri to get you results from ChatGPT.
00:35But it's not baked in as integrated as OpenAI had expected.
00:39OpenAI had expected this to be a multibillion-dollar initiative for them on an annual basis.
00:46They have an IPO, but it's actually been quite limited.
00:49And so OpenAI is very unhappy.
00:51They've tried to renegotiate the deal with Apple executives, but believe things have stalled.
00:56And they're now at the point where they are preparing possible legal action in the near future
01:01against Apple to try to come to some sort of resolution here.
01:05They're hoping for a resolution outside of court, but they have, like you mentioned,
01:10hired an outside law firm to work with its in-house legal team on this.
01:13And so this is at a fairly serious stage, we're told.
01:17So alleging breach of contract not fully at the legal stage yet, let's say, Mark,
01:22but could this be something that we might see with other partnerships and between other parties?
01:29Right now this is focused on OpenAI and Apple.
01:33Obviously in the AI universe, you have a bunch of companies fighting for that share of the pie
01:38and a bunch of companies working together and not wanting to work together.
01:42So I'd be surprised if there was not more litigation and other legal matters to come
01:47across the entire AI industry, not just involving Apple and OpenAI.
01:51It reminds me a little bit of the year of browsers, right,
01:54and when they were being included in various platforms and in various devices.
01:58So what should we expect now as a response from Apple?
02:01Will we get something public, you think?
02:03I wouldn't anticipate so.
02:05They're not commenting on this.
02:07For what it's worth, they have their own gripes with OpenAI, concerns about OpenAI's privacy practices,
02:13concerns about OpenAI's staying power as a company, concerned about the leadership of OpenAI.
02:18And obviously Apple has been furious for over a year,
02:21given that the AI company has been pillaging its hardware engineering ranks for talent for its own AI work.
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