Apple intends to employ Google’s Gemini artificial intelligence model to power the updated version of Siri, slated for release later this year, both firms announced on Monday.
“Following a thorough evaluation, Apple has determined that Google’s AI technology offers the most potent foundation for Apple’s foundational models, and eagerly anticipates the innovative new experiences it will unlock for Apple users,” stated a joint release from Apple and Google. Both companies noted they have entered into a multi-year pact where Apple will license the Google Gemini model and utilize its cloud infrastructure to support AI features.
This move may assist Apple in accelerating the launch of a more sophisticated, AI-driven iteration of its voice assistant, Siri, which experienced delays after its initial unveiling at the company’s 2024 Worldwide Developers Conference. The postponement had fueled concerns that Apple was trailing other tech titans in AI development.
The arrangement could suggest that Apple continues to face challenges in developing a competitive proprietary AI model internally, though Wall Street views this news favorably for the iPhone maker. Apple is counting on enhanced AI capabilities, including the revamped Siri, to boost device sales following several challenging years for the iPhone.
This also marks a significant win for Google in the ongoing Silicon Valley contest to build the most capable and widely adopted AI model. Apple is simultaneously collaborating with OpenAI to integrate ChatGPT for certain AI functionalities, but the pact announced Monday positions Gemini at the core of Apple’s future AI strategy. It remains unclear how, or if, Apple’s arrangement with Google will affect the integration of ChatGPT into some iPhone AI features.
“This is what the Street wanted, as the elephant in the room for Cupertino has been its opaque AI strategy, but we view this as a gradual positive for both parties,” Wedbush analyst Dan Ives commented via email.
The financial details of the agreement were not disclosed. CNBC initially reported on the deal.
Bloomberg reported in the autumn that Apple plans to spend roughly \$1 billion annually to incorporate Gemini into the revamped Siri, citing unnamed individuals familiar with the matter. The report also mentioned that Apple had previously explored partnerships with other AI companies for the project, including OpenAI and Anthropic.
Apple affirmed on Monday that under the new accord, Apple Intelligence AI features will continue to run either on users’ devices or within a secure cloud environment to safeguard their personal information.
Apple shares (AAPL) and Google (GOOGL) both saw gains of less than 1% around noon on Monday. The stock climb temporarily pushed Google’s market valuation past \$4 trillion in intraday trading Monday, making it the fourth public company to reach that milestone after Nvidia, Microsoft, and Apple last year.
Apple is projected to report iPhone sales growth of about 11% year-over-year when it releases its December quarter earnings later this month, based on analyst estimates compiled by FactSet. The company’s total quarterly revenue is expected to rise nearly 8% to exceed \$39 billion.
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