Apple Reportedly Said No To Meta's Offer For iPhone AI Integration Due To Privacy Policy Concerns

Apple Inc. AAPL has reportedly rejected a proposal from Meta Platforms Inc. META to integrate its AI chatbot, Llama, into the iPhone.

What Happened: Despite preliminary discussions in March, Apple and Meta are not currently in talks about a potential AI partnership involving Llama. Apple has decided not to proceed with the integration, partially because they didn’t think Meta’s privacy practices are stringent enough, reported Bloomberg, citing people with knowledge of the matter.

The discussions took place around the time Apple began negotiating deals to incorporate Microsoft Corporation MSFT -backed OpenAI's ChatGPT and Alphabet Inc.'s GOOG GOOGL Gemini into its products.

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Earlier this month, Apple announced the ChatGPT agreement and indicated that it plans to offer Gemini in the future. The tech giant is also reportedly in discussions with AI startup Anthropic about potentially adding its chatbot as an option.

Apple and Meta did not immediately respond to Benzinga’s request for comments.

The Tim Cook-led company’s new AI technology, Apple Intelligence, is set to roll out later this year as part of operating systems for the iPhone, iPad, and Mac. It includes features such as in-house tools for summarizing notifications, transcribing voice memos, and creating custom emojis.

However, Apple’s chatbot technology reportedly lags behind its competitors, leading the company to seek partnerships. The tech giant anticipates that customers will desire the flexibility to switch between different chatbots based on their needs, similar to how they might alternate between Google and Microsoft’s Bing for searches.

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Why It Matters: On Monday, Meta’s shares were trading higher following rumors of a potential AI partnership with Apple. The report by WSJ suggested that Meta was considering integrating its generative AI Platform into Apple Intelligence, Apple’s new AI system for iPhones.

Apple is also expected to explore partnerships with AI companies in various regions, such as China, where ChatGPT is banned.

A decade ago, Meta and Apple had a more amicable relationship, with the iPhone maker integrating Facebook into iOS. However, in recent years, the companies have become fierce rivals, competing in areas such as AI, home devices, and mixed-reality headsets, the report noted.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.