For two decades, the smartphone was the device people carried to access the internet. Now it’s becoming the device they carry to access artificial intelligence. The companies that understand the difference are building phones, forging $50 billion alliances and racing to control the operating system in the consumer’s hand.
According to Bloomberg, Apple plans to let iPhone users choose which AI model powers their device. Arriving in iOS 27, iPadOS 27 and macOS 27 this fall, the feature routes text generation, image editing and Siri queries to providers of the user’s choosing through a new Settings option called Extensions. ChatGPT has held the only third-party slot on Apple devices since iOS 18. Under Extensions, it becomes one option among many on a platform with more than 2 billion active devices.
A Platform Play, Not a Model Race
Rather than competing to build a world-class model, Apple is positioning its devices as the platform through which consumers access AI from anyone. Providers opt in through their App Store apps. Apple has already signed a reported $1 billion per year partnership with Google under which a custom Gemini model powers a rebuilt Siri, according to 9to5Mac. The Gemini consumer app will also function as a chooseable front-end extension, making Google both Apple’s infrastructure supplier and a competing option on the same interface.
Apple’s own description of the system, found in pre-release builds of iOS 27, frames it plainly: Extensions “allow you to access generative AI capabilities from installed apps on demand, through Apple Intelligence features such as Siri, Writing Tools, Image Playground and more.” Apple also plans to tell users it isn’t responsible for content generated by third-party models and will create a dedicated App Store section for compatible AI apps.
PYMNTS CEO Karen Webster, writing in her NEXT newsletter, put it directly: “AI is becoming a consumer utility. And consumer utilities live on smartphones.” PYMNTS Intelligence Consumer AI Adoption Benchmark data, drawn from nearly 20,000 U.S. consumers tracked monthly, found the fastest-growing AI tasks over the past six months are household logistics, discount code searches and meal planning. All those tasks that happen on a phone, not a desktop.
OpenAI Loses Ground
ChatGPT was the most-downloaded app of 2025, generating $1.35 billion in App Store revenue for Apple that year, as reported by Bloomberg. Under Extensions, it becomes one option among several. The phone a person carries already shapes the AI they use. Android users are 24% more likely to use Gemini than iOS users, because Gemini ships as the default, according to PYMNTS Intelligence. It doesn’t need to be chosen. It just shows up.
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iPhone users are 12% more likely to be active AI users than Android users and the segment most likely to want proactive, always-on AI. According to Webster, “Google has the integration. Apple has the audience.” Extensions lets Apple resolve that gap without winning the model race itself giving the audience access to the best integrations, on Apple’s hardware, through Apple’s App Store.
The Tollbooth Calculus
Every AI subscription purchased through the App Store generates a commission — 30% in year one, 15% after. Apple collects on every query flowing through the device it makes. As Webster wrote, “Apple’s the AI toll bridge, not the agentic highway.”
That position is under pressure from multiple directions. In April 2025, a federal district court found Apple had willfully violated an earlier injunction by blocking external payment options in the Epic Games case, according to Bloomberg. Apple lost its bid to pause those changes last week. A U.K. Competition Appeal Tribunal has also ruled against Apple in a £1.5 billion class action covering 36 million consumers.
Extensions expands the marketplace rather than defending its walls. More AI providers on Apple hardware means more subscription revenue flowing through the App Store even as individual commission rates face scrutiny. Apple is expected to formally announce the feature at WWDC on June 8.
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