Facebook's parent company has been in talks with Apple about integrating Meta Platforms' generative AI models into Apple Intelligence, its recently announced AI system for iPhones and other devices, according to people familiar with the matter.
Meta and other companies developing generative AI want to take advantage of Apple's massive distribution through the iPhone, similar to what Apple offers through its iPhone App Store.
Apple, a latecomer to the field of generative AI, has developed its own small-scale artificial intelligence models, but has said it will turn to partners for more complex or specialized tasks. When Apple Intelligence was announced at the company's Worldwide Developers Conference earlier this month, it announced OpenAI's ChatGPT as its first partner.
“We wanted to start with the best,” said Craig Federighi, Apple's head of software, noting that ChatGPT is “the best option for users today.” He also said that Apple wants to integrate Google's Gemini.
In addition to Google and Meta, AI startups Antropic and Perplexity are also in talks with Apple about bringing their generative AI to Apple Intelligence, according to people familiar with the talks.
Apple said that if it strikes deals with partners other than OpenAI, customers will be able to choose which external AI models to use in addition to Apple's in-house systems.
The Meta talks highlight the unlikely alliances forming between big tech companies in the age of artificial intelligence: OpenAI's technology is set to be built into Microsoft and Apple devices, and an Apple-Meta deal would be noteworthy given that the two companies are at each other's throats over other emerging technology issues.
In negotiations with other AI companies, Apple isn't asking either party to make payments, according to people familiar with the matter. Instead, AI companies can sell premium subscriptions to their services through Apple Intelligence, and Apple would get a cut of subscription revenues from its devices, just as it does with its own app store.
The talks have not yet been finalized and may still fail. A deal with Apple would help AI companies distribute their products at scale, but it's unclear how much economic benefit it would bring.
OpenAI offers a free version of ChatGPT through Apple Intelligence, but users can also link their premium ChatGPT account to their Apple devices.
The Apple partnership is expected to double ChatGPT's usage, but will increase OpenAI's infrastructure costs by 30% to 40%, said Gene Munster, a longtime Apple analyst and managing partner at Deepwater Asset Management. Munster expects 10% to 20% of Apple users to buy premium AI subscriptions for products like ChatGPT. That could mean billions of dollars in profits for AI companies that successfully integrate with Apple's new platform.
“Distribution is hard,” Munster said. “The great thing that Apple has built is they have distribution at scale.”
The partnership with Meta would help bolster the company's efforts in the tech industry's AI race and marks a rare reconciliation between the social media giant and the iPhone maker. Meta released Llama 2, a large-scale language model, in July 2023, and released Llama 3, the latest version of its AI model, in April. While Llama has gained support and adoption among the tech industry and startups, a deal with Apple would represent a major win for CEO Mark Zuckerberg and the company's AI division.
Tensions between the two companies have been going on for more than a decade, most notably over Apple's introduction of privacy changes on mobile devices in 2021 that Meta later said would cost it $10 billion in revenue in 2022. As reported by The Wall Street Journal, Meta issued a directive in April recommending workarounds for advertisers to avoid paying Apple a 30% service fee for “boosted posts,” a form of advertising that the two companies have long been fighting over.
Consulting with various AI companies will allow Apple to avoid over-reliance on OpenAI. However, it remains to be seen how open Apple will be to its new AI platform to these external AI companies. These AI contracts take time because, for now, they must be signed on a company-by-company basis. Meanwhile, the App Store has an established process where developers are free to submit apps for Apple's approval before they appear in the digital store.
Apple's Mr. Federighi said it makes sense for the company to offer numerous AI options because users prefer different models for different tasks, such as creative writing or researching medical information. “People are going to want to take advantage of that expertise that might not be part of our core,” he said at Apple's developers conference earlier this month.
News Corp, which owns the Journal and Dow Jones News Agency, has a content licensing partnership with OpenAI.
Write to Salvador Rodriguez at salvador.rodriguez@wsj.com, Aaron Tilley at aaron.tilley@wsj.com and Miles Kruppa at miles.kruppa@wsj.com.
