Apple raked in $900M from generative AI apps in 2025 despite lagging behind in the AI race

Apple Profits From Generative AI Apps Without Leading the Race

Apple collected nearly $900 million in App Store fees from generative AI apps in 2025, according to data from analysis firm AppMagic 1

1

2

2

. This substantial App Store revenue came despite the company lacking a competitive chatbot to rival OpenAI's ChatGPT or other leading generative AI platforms. The tech giant's dominant position as gatekeeper of more than 2.5 billion active devices allows it to profit handsomely from AI innovations developed by competitors 3

3

.

ChatGPT subscriptions drove the overwhelming majority of this windfall, accounting for approximately 75% of Apple's total commission gains from generative AI apps on the App Store 1

1

. Elon Musk's Grok app came a distant second, contributing just 5% of the revenue 2

2

. Apple typically collects up to 30% of subscription fees in the first year and 15% in subsequent years from apps distributed through its platform 3

3

.

App Store Fees Surge as AI Adoption Accelerates

Between January and August 2025, Apple's revenue from generative AI apps nearly tripled. AppMagic reports that monthly earnings rose from approximately $35 million in January 2025 to a peak of $101 million in August 1

1

3

3

. Revenue subsequently trended downward due to a decline in ChatGPT downloads, though the company remains on track to cross $1 billion in AI revenue from App Store fees alone in 2026 3

3

4

4

.

This revenue stream stands in stark contrast to Apple's relatively modest AI spending compared to rivals like Microsoft, Amazon, and Meta, all of whom have poured tens of billions into AI infrastructure with little to no profit yet to show for it 2

2

. Apple's capital expenditures have remained comparatively flat, thanks to its prioritization of investment in on-device AI over large data centers filled with GPU processors 2

2

.

Apple's AI Strategy Relies on Partnership With Google

While Apple collects substantial fees from AI competitors, its own Siri chatbot remains weak by modern AI standards 1

1

2

2

. The company has encountered roadblocks in upgrading Siri with AI capabilities, delaying the overhaul to later this year due to development challenges and testing issues 3

3

. Tests revealed that Siri can take too long to handle requests and sometimes fails to process queries.

To address these shortcomings, Apple announced in January that Gemini AI will power a revamped version of Siri, providing better contextual awareness, enhanced ability to answer questions, and voice-controlled app actions 3

3

4

4

. The partnership with Google will leverage a 1.2-trillion-parameter custom Gemini AI model to support Apple Intelligence features 2

2

4

4

.

Neither Apple nor Google has disclosed the financial terms of their partnership, but Bloomberg reported last year that it would be approximately $1 billion annually 2

2

. Ironically, this price tag may effectively be funded by Google's own competition on the App Store, as the search giant already pays Apple around $20 billion per year to remain the default search engine on iPhones 2

2

.

Looking Ahead: Apple's Toll Road Strategy

Some investors view Apple's approach as a viable long-term strategy. Charles Rinehart, chief investment officer of Johnson Asset Management, suggested that if Apple "can act as a toll road for providers of AI, then they'll probably end up looking good long-term" 2

2

. The company's AI plan runs counter to strategies of competitors spending hundreds of billions on chips and data centers to build frontier large language models .

Meanwhile, OpenAI reported last month that ChatGPT had reached 900 million weekly active users 3

3

. The company is also poised to develop new devices that could compete with Apple, having acquired AI device startup io for $6.5 billion in May 2025. Former Apple designer Jony Ive joined OpenAI as part of the acquisition, working on a secretive AI-powered device that could potentially replace phones 3

3

. With next year's iOS 27 update, Apple plans to launch a dedicated Siri chatbot running on Google's TPUs and cloud infrastructure, featuring advanced capabilities including web search, content generation, coding assistance, and the ability to analyze on-screen content 4

4

.