Apple Inc. (NASDAQ:AAPL) CEO Tim Cook continues to remain tight-lipped about the details of the "commercial agreement" between his company and ChatGPT-parent OpenAI.
What Happened: On Thursday, during Apple's third-quarter earnings call, Cook was asked about the revenue models surrounding partnerships like OpenAI by Bank of America analyst Wamsi Mohan.
Mohan also said that investors are keen to understand whether Apple Intelligence will drive more significant growth in Services over time, or if these partnerships will become the more substantial contributors.
"The monetization model, I don't want to get into the terms of the commercial agreements because they are confidential between the parties. But I see both aspects as being very important. People want both," Cook stated.
He also said that Apple Intelligence focuses on on-device processing and private cloud computing. "And a lot of that will be things with a personal context."
For broader world knowledge, Apple is initially integrating with ChatGPT, which will handle information beyond the personal scope, Cook added.
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Why It Matters: Apple's partnership with OpenAI was announced at the WWDC 2024. The collaboration, which integrated ChatGPT into Siri and new writing tools, is expected to offer an advanced chatbot to consumers.
However, the partnership did not reportedly involve any cash payments from Apple to OpenAI, as the exposure of ChatGPT-maker's brand and technology to Cupertino's extensive user base was deemed of equal or greater value.
The partnership was also not without controversy, with Tesla and SpaceX CEO Elon Musk publicly criticizing the collaboration over concerns about data security and privacy issues.
Earlier, Apple also revealed plans to integrate Alphabet Inc.'s Google Gemini AI model into its Apple Intelligence feature set, providing users with a wider range of AI models. The company is reportedly considering an AI partnership with Anthropic.
Meanwhile, Apple's third-quarter earnings surpassed expectations. The company's revenue grew by 4.9%, reaching $85.78 billion for the three months ending June 29. This figure exceeded the average analyst estimate of $84.53 billion, according to Benzinga Pro data.
Price Action: At the time of writing, Apple shares were slightly up during the after-hours session at $219.60. The stock closed Thursday's session down 1.68%, finishing at $218.36.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
