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Apple’s OpenAI Partnership: Balancing iPhone Privacy, Security, and AI Functionality in iOS 18

TLDR: Apple is nearing a deal with OpenAI to use its AI technology on the iPhone for iOS 18, balancing privacy, security, and functionality. The partnership could power an iPhone chatbot, while Apple focuses on on-device and cloud-based AI processing using its own chips.

Apple is nearing a deal with ChatGPT maker OpenAI just weeks ahead of the launch of its iOS 18 iPhone upgrade, according to a new Bloomberg report citing “people familiar with the matter.” This partnership will allow Apple to use OpenAI’s AI technology on the iPhone, raising questions about the security, privacy, and functionality of the device.

Apple’s AI Strategy

Privacy and security are at the heart of Apple’s AI strategy, with the company processing as much as possible on-device. On-device processing is more secure and private than cloud because it means your data stays on your iPhone, rather than being sent to third-party servers.

AI requires vast amounts of data to learn—a key concern as smartphone makers Apple and Google’s Android add these capabilities to their devices.

Vital considerations.

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 also boast these capabilities.

In-House and Partnership Efforts

Apple is putting its own Mac-grade chips in its servers, which will give it more control over cloud-based capabilities for AI. This will allow it to claim data privacy even off the device for some of its AI features.

The partnership with OpenAI could power an iPhone chatbot, offering Apple a cool new tool that users want, but passing the liability for data onto OpenAI.

Strategic move.

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

  1. On-device LLM (in house)
  2. Cloud-powered LLM (in house)
  3. 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.”

Drawbacks of On-Device Processing

While on-device processing offers security and privacy benefits, it does have drawbacks. For example, functionality is an issue for older iPhones. As Forbes‘ contributor Zak Doffman writes: While AI will offer powerful features processed on the device, this will only be possible if your iPhone is capable of it.

Therefore, it is likely there will be an “iOS on the iPhone 16” caveat for full-scale on-device processing, he says. “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.”

Limitations exist.

Privacy and Security vs. Functionality

On-device processing and control over iPhone data will be a key battlefield when Apple debuts iOS 18 at its Worldwide Developers Conference next month. Privacy and security versus functionality is an age-old issue, and one that is set to continue as AI features become commonplace on smartphones.

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 for data to OpenAI, keeping its own reputation for privacy and security intact.

A balancing act.


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