Impact of Apple’s AI Invention Tax on OpenAI and Others

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Apple may not be a leader in artificial intelligence (AI), but its firm grip over the app market gives the company the opportunity to reap the spiritual rewards of others’ success. This is highlighted by the recent launch of OpenAI’s ChatGPT app for iPhones, which quickly shot up to the top of the App Store. As of Friday, ChatGPT is the number one free app for iOS users, and Apple has already started promoting it in its “Essentials” category.

The app allows people to subscribe to the “ChatGPT Plus” service, which for $20 a month guarantees faster response times and priority access to new features. Instead of redirecting users to a website outside of the Apple platform to purchase the subscription, OpenAI has opted to use Apple’s in-app purchasing system, meaning that Apple gets its standard 30% cut of each purchase. This means that a single new ChatGPT Plus subscriber on the iOS platform would result in Apple taking a cut of $6 a month, or $72 a year.

When considering the potential reach of the ChatGPT Plus service on iOS, Bernstein tech analysts commented on this saying that “Apple is getting their 30% tax”. If the service were able to gain as many as 5 million subscribers, Apple would be pocketing an eye-watering $360 million in yearly revenue. All this without having to make a substantial contribution to public research in the field.

The recent antitrust case against Apple brought by Fortnite developer Epic Games, which claimed that Apple was illegally restricting app distribution to their platform, was eventually ruled against the developer. Although users are now allowed to bypass Apple’s payment processor via a browser, OpenAI have obviously chosen not to go this route. Apple is banking on this while simultaneously playing up its AI credentials and claiming that it will be as deliberate and thoughtful on the matter as possible.

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In the most recent quarter, Apple’s services business accounted for record revenues of $20 billion. AI could become a major factor within this growth, especially because at the moment the company is generating profit from the service almost entirely without doing anything itself.

OpenAI is a non-profit artificial intelligence research lab, co-founded by machine learning entrepreneur and investor, Sam Altman. Based in San Francisco, OpenAI focuses on developing advanced artificial intelligence technologies such as robotics, natural language processing, and machine learning. It also organizes and participates in forums such as the Global AI Challenge, and has invested in companies such as Uber, Slack, and Coursera.

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