According to Bloomberg News, Apple (AAPL.O) is currently engaged in discussions to integrate Google's Gemini artificial intelligence engine into the iPhone. Sources familiar with the matter revealed that negotiations are underway to potentially license Gemini for upcoming features in iPhone software slated for release later this year. However, details regarding the terms of the agreement, branding, or implementation methods have yet to be finalized.
Alphabet shares surged by over 6% in early U.S. trading following the news, while Apple's stock rose by 2.5%. Any potential deal is not expected to be announced until June, coinciding with Apple's annual developer conference. Recent reports also suggest that Apple has been in talks with OpenAI, the creator of ChatGPT, regarding the utilization of its model.
Both Apple and Google, along with OpenAI, have not responded immediately to requests for comment from Reuters. If a deal materializes, it could significantly expand Google's AI services to over 2 billion active Apple devices, potentially aiding Google's efforts to compete with Microsoft-backed OpenAI.
This collaboration could also address concerns among investors regarding Apple's slow adoption of AI applications, which has contributed to a 10% decline in its shares this year, resulting in its loss of the title of the world's most valuable company.
The partnership between Apple and Google is longstanding, with Google serving as the default search engine on Apple's Safari web browser. A potential tie-up involving genAI could help Google navigate concerns about maintaining its dominance in search, particularly as services like ChatGPT gain traction.
However, such an agreement may attract closer scrutiny from U.S. regulators, who have accused Google of anticompetitive behavior, including allegedly paying Apple billions of dollars to maintain its search monopoly.
Analyst Daniel Ives of Wedbush described the potential partnership as a crucial component of Apple's AI strategy, allowing Google's Gemini to power some of the AI features Apple intends to introduce. He emphasized the significance of Google gaining access to Apple's vast user base, along with the substantial licensing fees involved.
Earlier in January, Google announced a partnership with Samsung to deploy genAI technology in its Galaxy S24 series, aiming to bolster the adoption of Gemini following initial setbacks.
Apple CEO Tim Cook recently emphasized the company's significant investment in generative AI, hinting at plans to unveil more details about its implementation later this year. While Apple plans to utilize its own AI models for certain features in iOS 18, it is seeking a partner to leverage genAI capabilities, such as image creation and essay writing based on simple prompts.
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