Apple Intelligence is run on-device and on Apple's Private Cloud Compute, it does not use OpenAI. Apple also allows ChatGPT (and later other models) to be called directly from Siri and writing tools, in cases where Apple Intellgence can't solve the task. That is for example for when some text should be composed, like a story or recipe. Nothing about this contradicts with what I have written previously.
Yeah so it seems we agree, Apple resorts to third party AI for some tasks.
"Apple Intelligence" is a strange marketing driven name because it implies to the tech naive that all AI in an iPhone is offline.
When in fact "Apple Intelligence" is just the name for some of the AI functionalities in Apple devices. Some functionalities will still send data to ChatGPT and perhaps other third party providers in the future.
But Apple gets to advertise "Apple Intelligence" as privacy conscious, offline, personal AI and still be technically correct. Classic.
It's very clear when ChatGPT gets involved - you get a prompt asking you if you want to send the query to ChatGPT ("ChatGPT" being referred to by name). There's no feasible way to have your data sent to ChatGPT unintentionally.
Anyway, ChatGPT was a very small portion of the Apple Intelligence demo. The significant majority of the functionality they showed (all the non-ChatGPT stuff) was on-device or in Apple's Private Cloud Compute, the privacy story for which is quite good.