[Photo Credit: Reuters]

Apple’s (AAPL.O), opens new tab two-year-old partnership with OpenAI has become strained, with the AI startup failing to see the ​expected benefits from its deal with the iPhone maker and preparing ‌possible legal action, a person familiar with the matter said on Thursday.

OpenAI wanted to resolve its issues with Apple without resorting to legal action, but its lawyers are actively working with ​an outside legal firm on a range of options, the source ​said. The options include notifying Apple of a breach of ⁠contract but not filing a full lawsuit, the source said, confirming a Bloomberg ​News report on OpenAI’s internal deliberations.

Apple did not immediately respond to requests for ​comment.

In 2024, Apple announced integration of its “Apple Intelligence” technology across its apps including Siri and bringing OpenAI’s chatbot ChatGPT to its devices.

Their partnership allows users to access ChatGPT results through Siri, while ​iPhone users can also sign up for ChatGPT memberships directly from the iOS ​settings menu.

OpenAI believed that the deal would boost ChatGPT subscriptions and lead to deeper integration ‌across ⁠Apple apps, but the relationship has deteriorated, the report said, adding that OpenAI’s attempts at renegotiating the deal have stalled.

Bloomberg News reported this month that Apple will allow users to select from third-party AI models and OpenAI could lose ​its unique role within ​Apple’s software.

Apple is ⁠testing integrations with both Anthropic’s Claude and Google Gemini as part of this push, the report said.

Apple’s embrace of ​other AI providers is not driving the company’s legal action, the ​source confirmed, ⁠because the partnership was not meant to be exclusive from the start.

Google’s Gemini is expected to power Apple’s revamped Siri coming this year. Apple is scheduled to ⁠hold its annual ​software developer conference in June, where it ​is expected to reveal more details about its AI plans.