Apple Is Way Behind in AI—and Still Making a Fortune From It

Apple is on pace to surpass $1 billion in artificial-intelligence revenue this year, a tidy sum that demonstrates the company’s AI advantage even as it struggles to deliver an AI strategy of its own.
Its Siri chatbot is still weak by modern AI standards. What Apple does have that the other AI players don’t is a dominant position making devices. However fancy OpenAI, Google, Anthropic and xAI make their chatbots, iPhones are still a primary way to deliver them to consumers.
That means they typically pay the App Store tax, roughly 30% of subscription fees in the first year and 15% a year thereafter, though rates vary by country. Generative AI apps paid Apple nearly $900 million in App Store fees in 2025, according to the analysis firm AppMagic.
Three-fourths of the revenue Apple rakes in from GenAI apps in its App Store comes from ChatGPT, according to AppMagic. Next, at about 5%, is xAI’s Grok. Apple’s revenue from GenAI apps rose from about $35 million in January 2025 to a high of $101 million in August. Sales have fallen from their peak, partly because ChatGPT downloads have declined, according to the data.
As a proportion of Apple’s total sales, $1 billion is small. Yet GenAI apps are a growth driver for Apple’s services business, which investors have focused on in recent years because it has grown faster than device sales and boasts higher profit margins.
Apple’s dominant share at the top of the smartphone market affords it another luxury: time to get its own AI strategy right.
Apple’s AI plan runs counter to strategies of competitors that are spending hundreds of billions of dollars on chips and data centers to build frontier large language models. Apple is spending a fraction of that, aiming instead to use all the personal information people store on their iPhones together with chips it designs itself to power an on-device AI strategy. That strategy could prove a winner if, as some AI researchers have suggested, access to user data and strong user privacy makes on-device AI the dominant way consumers access the technology.
Apple investors want to see progress from Apple’s own AI strategy, said Charles Rinehart, chief investment officer of Johnson Asset Management, an Apple shareholder. “If they can act as a toll road for providers of AI, then they’ll probably end up looking good long-term for not having the big capex overhang,” he added.