Last year, OpenAI unveiled an ambitious plan permitting companies such as Spotify (SPOT.US) and Booking Holdings (BKNG.US) to launch mini-apps within ChatGPT, enabling users to access their services without leaving the chatbot. This move drew market comparisons to the debut of Apple's (AAPL.US) App Store and was seen as a critical step for OpenAI in developing ChatGPT into an all-in-one platform. The promotion of ChatGPT apps could intensify the growing competition with Apple, steering consumers towards an ecosystem of applications and services outside the App Store. In November, Apple took measures to curb this by introducing a "mini-app" policy, requiring so-called super apps to pay Apple a 15% cut of revenue from in-app purchases.
However, six months later, the initiative is progressing slowly, according to interviews with app developers. Although over 300 applications have been integrated, they remain hidden, and their functionality is limited by partner companies reluctant to hand over customer relationships and payment processes to OpenAI. Developers have also complained about a cumbersome app approval process, a bug-ridden coding system, and a lack of usage data. This underwhelming debut adds another entry to OpenAI's list of product investments that have yet to yield returns. As previously reported, the company announced last week it would halt development of the Sora video generator, a move aimed at streamlining its product line ahead of a potential IPO later this year.
OpenAI is also working to integrate its emerging browser, Atlas, with its chatbot and coding tools into a single desktop application, though this browser encountered issues in its early stages. As OpenAI faces increasing competition from Anthropic PBC and Alphabet's (GOOGL.US) Google, third-party integrations are crucial for attracting more users. This will also help OpenAI ultimately achieve its goal of integrating its software into consumer devices.
The effectiveness of integrated ChatGPT apps has been modest. Stubhub Holdings (STUB.US) and Booking do not currently view their ChatGPT apps as significant marketing drivers. Booking CEO Glenn Fogel stated in an interview, "It's easier to discover listings on Booking.com," adding that referral traffic from ChatGPT remains "very small." He noted that the company's spending on Google ads is still "very large" compared to its investment in the OpenAI chatbot. OpenAI stated that its app platform is central to its product strategy. A spokesperson said, "We are still in the early stages of building the platform, and we recognize that the developer experience needs improvement in some areas," adding that the company is committed to making the platform "more reliable, predictable, and easier to scale on over time."
The mixed reception of OpenAI's app project offers a new perspective on Wall Street's previous optimism and concerns about the technology. Early partners, including Figma (FIG.US), Expedia (EXPE.US), and Target (TGT.US), saw their stock prices surge after the initial announcement, as the collaboration offered a new way to acquire users in the AI era rather than being disrupted by AI. Some consumer goods companies consider partnering with AI chatbots necessary, viewing them as an emerging search channel similar to Google. However, AI assistants are not the sole means for consumers to learn about brands, and these chatbots are far from replacing the search giant. According to a company spokesperson, DoorDash (DASH.US) also found that no single partner integration, whether with ChatGPT, Google, or ordering buttons on Yelp Inc. (YELP.US), "can monopolize customer attention."
In recent earnings calls, executives from companies like Airbnb (ABNB.US), Booking, Expedia, DoorDash, and eBay (EBAY.US) highlighted their superior payment systems, round-the-clock customer support, user verification, and reviews as reasons they would not be replaced by AI-driven tools. Jefferies analyst John Colantuoni stated that AI models "currently lack the capability to provide a better service." This creates a "chicken-and-egg dilemma": consumers will only switch to AI if the service is better or cheaper, while businesses have little incentive to empower a middleman.
Few apps offer checkout options that don't force users to leave OpenAI's chatbot. For example, with Uber (UBER.US), users must first type "@Uber" to begin, then tell the chatbot their pickup and drop-off locations and view the estimated fare range. Since passengers can only complete the booking on Uber, booking directly through the Uber app is faster. Instacart is an exception, with deeper payment integration, partly because its CEO Fidji Simo previously led the company.
The ticket resale platform StubHub allows ChatGPT users to search for concerts, events, and seat information based on preferences like budget or view. However, users must visit the StubHub website to complete a purchase, and even zooming in to view a seat map requires accessing the site. StubHub President and Chief Product Officer Nayaab Islam said customers have not yet adopted chatbots as a "primary" shopping method, noting that consumers are wary of sharing credit card details with AI assistants. Nevertheless, he stated that not participating would be "unwise," given the chatbot app's billions of users. He said, "For a business like ours, having more options is a good thing."
Consumer unease with AI is not isolated. A new report from ad tech firm Criteo this month revealed that 55% of over 6,000 consumers surveyed globally are "extra cautious about sharing payment information with AI." The report noted that consumers are experimenting with AI as an assistant but "have not yet fully relinquished control." The study found that 96% of frequent AI chatbot users also utilize other channels simultaneously, such as social media, traditional search, and retailer websites.
It's not only consumers who have yet to fully embrace the ChatGPT app store; developers also find the app development process frustrating. Hanh Nguyen, CEO of Fractal, a startup developing chatbot app tools for non-programmers, said that for some developers, publishing an app to the store is a protracted ordeal. She pointed out that some apps were rejected due to "false signals" flagged by OpenAI's AI-assisted review system, requiring intervention from human customer support to resolve. OpenAI stated that its approval speed has increased significantly, thanks to streamlined processes and developers addressing previously identified issues. According to Elliot Garreffa, co-founder of a third-party platform tracking and testing ChatGPT app performance, the company approved nearly 70 apps last week, compared to just 3 to 5 per day previously.
Some developers encounter problems even after their apps are accepted. Garreffa stated that because OpenAI defines chatbot prompt information as private data, programmers find the analytics data they can access "very limited," leaving them "almost in the dark" about user engagement. Garreffa added, "A constant pain point we hear from businesses is, 'My app is live, but I don't know if it's functioning correctly, if it's stable,' or if it's reaching the target audience." As the platform is still nascent, there are no proven methods to influence an app's visibility, unlike iOS app developers who can test different strategies to improve their rankings. Furthermore, with OpenAI beginning to incorporate ads into the chatbot, partner apps may increasingly find themselves competing with sponsored content for user attention, potentially heightening discoverability concerns.
Meanwhile, developers are grappling with bugs in the development tools that make their work more difficult. Fractal CTO Max Ockner said, "Apps in development mode can malfunction, and we have to wonder, 'What's going on?' Then we have to check what the developers did to find out they changed something before the official release." Although OpenAI maintains a changelog for the app framework, the documentation isn't promptly updated with bugs submitted by users on its public developer forum. Ockner remarked, "The floodgates haven't opened yet; we're still waiting for that moment."
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