Apple is reportedly in discussions to embed Google’s Gemini AI engine into its iconic iPhone, according to Bloomberg News. Citing sources familiar with the matter, the talks revolve around licensing Gemini to enhance upcoming features in iPhone software, though specifics regarding the terms and implementation remain undecided.
Shares of Alphabet surged over 6% in early U.S. trading following this revelation, while Apple experienced a 2.5% uptick. Although any potential agreement might not be finalized until June, coinciding with Apple’s annual developer conference, recent discussions with OpenAI, the creator of ChatGPT, also hint at Apple’s intent to bolster its AI capabilities.
Both Apple and Alphabet-owned Google have refrained from immediate comments regarding these developments, leaving industry observers to speculate on the ramifications of such a collaboration.
If materialized, this partnership could significantly extend Google’s AI services to over 2 billion active Apple devices, marking a notable stride in its efforts to rival Microsoft-backed OpenAI. Additionally, it may assuage concerns among investors regarding Apple’s slower adoption of AI applications, which contributed to a recent decline in its stock value.
The long-standing alliance between Apple and Google, which designates Google as the default search engine on Apple’s Safari web browser, provides a foundation for this potential collaboration. Integrating Gemini could further fortify Google’s position in the AI landscape, potentially mitigating concerns over emerging competitors like ChatGPT.
However, such a collaboration could invite scrutiny from U.S. regulators, particularly in light of ongoing antitrust concerns surrounding Google’s dominance in search. Regulatory bodies have previously scrutinized Google’s agreements with Apple, alleging anti-competitive behavior aimed at preserving its search monopoly.
Analysts view this prospective partnership as a strategic move for both parties. Daniel Ives, an analyst at Wedbush, highlights the significance of Apple’s integration of Gemini, suggesting that it fills a crucial gap in Apple’s AI strategy while providing Google access to Apple’s vast user base.
Earlier this year, Google announced a partnership with Samsung to integrate its genAI technology into the Galaxy S24 series, indicating efforts to expand Gemini’s reach beyond its initial rollout challenges.
Apple CEO Tim Cook’s recent statements affirm the company’s commitment to generative AI, promising further revelations about its AI strategy later this year. While Apple aims to utilize its proprietary AI models for certain functionalities in iOS 18, it seeks collaboration to empower genAI features, such as image creation and text generation based on simple prompts.
In summary, Apple’s potential integration of Google’s Gemini AI into the iPhone signifies a significant step towards enhancing AI capabilities on its devices. This move not only fosters innovation but also intensifies competition in the AI space, potentially reshaping the dynamics of the tech industry. However, the outcome of these negotiations and their implications on market dynamics await further developments in the coming months.
