Apple is reportedly planning to build Google’s new Gemini AI engine into the iPhone, which would set the stage for an agreement that would rock the AI industry.
Both companies are in negotiations to let Apple licence Gemini, to power new features arriving on iPhone software this year.
Inside sources also claimed Apple recently held discussions with OpenAI, and considered using this model.
If a deal between Apple and Google happens, it would build upon their search partnership. For years, Google has paid Apple billions annually to make the search engine available on Safari on Apple devices.
Neither party has decided the terms or branding of an AI agreement, or finalised the implementation process.
Shares for Alphabet (Google’s parent company) rose 4.6% recently, which is the biggest single day gain since December. Apple rose less than 1%.
A deal like this would give Gemini an edge with billions of potential users. It could also be a sign that Apple is close with its AI efforts, and threatens to bring further antitrust scrutiny.
Apple is currently planning new features for iOS 18, based on AI models. These are said to be focused on features operating the device, rather than those delivered via the cloud.
Beginning early last year, Apple started testing its own large language model, codenamed Ajax. Some employees have tried out a basic chatbot called Apple GPT, but the technology remains inferior to Google’s and other rivals.
An Apple deal would become Google’s highest-profile partnership for Gemini to date, and could boost their AI efforts.
Apple currently has over 2 billion devices in active use, which could become home to Google Gemini later this year. Samsung rolled out new smartphones with Gemini attached in January.
Bloomberg Intelligence Senior Industry Analyst, Mandeep Singh said, “Apple’s potential use of Google Gemini for generative AI inferencing further lowers the risk of any near-term market-share loss for the latter in search. We believe Apple’s current deal with Google, which pays $20 billion in traffic-acquisition costs on iOS devices, gives the latter an incumbent advantage over gen-AI-based search competitors — including OpenAI — which rely on Bing for real-time links to web pages.”
A partnership would however, likely catch the attention of regulators, and Google’s current deal with Apple for search is the focus of a lawsuit by the US Department of Justice.
It was alleged both companies have operated as a single entity to corner the search market for mobiles.
This arrangement is also under fire in the EU. It’s forcing Apple to make it easier for consumers to change the default search engine away from Google.
Talks between Apple and Google remain active, however, it’s unlikely any deal would be announced before June, which is when Apple plans to hold the annual WWDC (Worldwide Developers Conference).
Gemini has also had its fair share of controversy. Last month, users found the system sometimes inaccurately handled the race of individuals depicted in AI-generated images.
Google’s CEO Sundar Pichai called the issue “completely unacceptable,” and image generation was paused.
Apple’s CEO Tim Cook has promised a major AI announcement this year, telling investors the company would release transformative features that “break new ground.”
Last year he said he personally uses ChatGPT, but noted there were “a number of issues that need to be sorted.” He then promised new AI features would come to Apple platforms on a “very thoughtful basis.”
These features would theoretically be implemented into Siri and other apps, whereas AI capabilities based on Apple’s homegrown models, would be woven into the operating system.
They will be focused on providing information to users, and conducting tasks on their behalf in the background, according to insider sources.
