Apple Nearing Deal with OpenAI for iOS 18 iPhone Upgrade: What it Means for Security and Privacy

Apple is nearing a deal with ChatGPT maker OpenAI just weeks ahead of the launch of its iOS 18 iPhone upgrade. The OpenAI deal will allow Apple to use the firm’s AI technology on the iPhone, according to a new Bloomberg report, which cites “people familiar with the matter.”

The news that Apple is in talks with OpenAI isn’t new—it was already known that the iPhone maker was speaking to both Google and the ChatGPT owner for chatbot features in iOS 18.

However, after this latest report, it’s now looking increasingly likely Apple will team up with an outside party for some of its iOS 18 iPhone AI features.

Apple’s AI Strategy

Privacy and security are at the heart of Apple’s AI strategy. After all, one of the iPhone maker’s ads states, “Privacy. That’s iPhone.”

This is also the ethos underpinning all the AI features coming in iOS 18, with Apple processing as much as possible on-device. Apple is already making chips capable of powerful processing required for AI tools, such as the M4 chip in the latest iPads. When the iPhone 16 launches this fall, it will boast these capabilities.

Apple is putting its own Mac-grade chips in its servers, which will give it more control over cloud-based capabilities for AI. Finally, the partnership with OpenAI could power an iPhone chatbot.

The move to do a deal with OpenAI is similar to Apple’s partnership with Google for Search, which has been place for years and is worth a reported $18 billion.

As Bloomberg’s Mark Gurman writes, Apple’s AI strategy covers three areas:

A) On-device LLM (in house)

B) Cloud-powered LLM (in house)

C) Chatbot “(OpenAI for sure, Google maybe).”

“Apple isn’t building its own chatbot but knows the market wants it so it’s going elsewhere for it,” Gurman says. “It’s the same playbook as search.”

Yet security and privacy does have drawbacks. While on-device processing offers privacy and security, functionality is an issue for older iPhones. As Forbes’ Zak Doffman writes: “While AI will offer powerful features processed on the device, this will only be possible if your iPhone is cable of it same will be true for older iPhones when iOS 18 hits the streets—thus the likely ‘iOS on the iPhone 16’ caveat for full-scale on-device processing.

“Newer hardware can be optimized for AI, it’s just not possible to do the same with older, general purpose processing and achieve anything close to similar results.”

On-device processing and control over data will be a key battlefield when Apple debuts iOS 18 at its Worldwide Developers Conference next month.

For now, the reported OpenAI deal provides Apple with functionality for the iPhone when iOS 18 arrives this Fall. If it does happen, it also allows Apple to offload the liability to OpenAI, keeping its own reputation for privacy and security intact.