According to a report by Bloomberg News on March 18, Apple (AAPL.O) is currently discussing incorporating Google’s Gemini artificial intelligence engine into the iPhone. This move aims to introduce new AI-powered features to iPhone software this year. While negotiations are ongoing, specifics such as the terms of the agreement and implementation methods have yet to be finalized.
Shares of Alphabet, Google’s parent company (GOOGL.O), surged more than 6% in early U.S. trading following the news, while Apple saw a 2.5% increase. However, no formal announcement regarding the deal is expected until Apple’s annual developers’ conference in June.
The report also mentioned that Apple has recently engaged in talks with OpenAI, the creator of ChatGPT, regarding the potential utilization of its model. However, neither Apple, Google, nor OpenAI have responded to requests for comments from Reuters.
If the agreement proceeds, 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. Moreover, it might address concerns about Apple’s slow adoption of AI applications, which has experienced a decline in market value this year.
Apple and Google have a longstanding partnership, with Google serving as the default search engine on Apple’s Safari web browser. Incorporating Google’s AI technology could further solidify this collaboration, although it may attract scrutiny from U.S. regulators due to ongoing concerns about monopolistic practices in the tech industry.
Analysts view this potential partnership as a strategic move for both companies, with Daniel Ives from Wedbush highlighting the significance of combining Google’s Gemini with Apple’s AI strategy. Google’s recent collaboration with Samsung to deploy its AI technology in Galaxy S24 smartphones underscores its efforts to expand Gemini’s usage.
Apple’s CEO, Tim Cook, previously stated the company’s significant investment in generative AI and hinted at unveiling further plans later this year. While Apple intends to use its proprietary AI models for some new iOS 18 capabilities, it seeks a partner to power genAI features, such as image creation and essay writing based on prompts.