Apple in talks to let Google Gemini AI power iPhones
The likely deal may be a sign that Apple isn’t as far along with AI efforts as some had hoped
Apple Inc. is in talks to build Google’s Gemini artificial intelligence (AI) engine into the iPhone, according to people familiar with the situation, setting the stage for a blockbuster agreement that would shake up the AI industry.
The two companies are in active negotiations to let Apple license Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year, said the people, who asked not to be identified because the deliberations are private.
Apple also recently held discussions with OpenAI and has considered using its model, according to the people.
If a deal between Apple and Google comes to fruition, it would build upon the two companies’ search partnership.
For years, Alphabet Inc.’s Google has paid Apple billions of dollars annually to make its search engine the default option in the Safari web browser on the iPhone and other devices. The two parties haven’t decided the terms or branding of an AI agreement or finalized how it would be implemented, the people said.
Alphabet shares rose as much as 7.4% on Monday as the markets opened in New York. It was the biggest intraday gain since 2 February 2023. Apple was up 2.2%.
A deal would give Gemini a key edge with billions of potential users. But it also may be a sign that Apple isn’t as far along with its AI efforts as some might have hoped — and threatens to draw further antitrust scrutiny of both companies.
Apple is preparing new capabilities as part of iOS 18 — the next version of the iPhone operating system — based on its own AI models. But those enhancements will be focused on features that operate on its devices, rather than ones delivered via the cloud. So Apple is seeking a partner to do the heavy lifting of generative AI, including functions for creating images and writing essays based on simple prompts. Spokespeople for Apple and Google declined to comment. OpenAI didn’t immediately respond to a request for comment.
Since early last year, Apple has been testing its own large language model — the technology behind generative AI — code-named Ajax. Some employees also have been trying out a basic chatbot dubbed Apple GPT. But Apple’s technology remains inferior to tools from Google and other rivals, according to the people, making a partnership look like the better option.
A deal with Apple would be Google’s highest-profile partnership for Gemini to date and could be a major boon for the company’s AI efforts.
Apple has more than 2 billion devices in active use that could potentially become home to Google Gemini later this year.
In January, Samsung Electronics Co. rolled out new smartphones with AI features powered by Gemini.
“Apple’s potential use of Google Gemini for generative AI inferencing further lowers the risk of any nearterm 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,” said Mandeep Singh, senior industry analyst, Bloomberg Intelligence.
However, a partnership between the two Silicon Valley giants would likely draw the eye of regulators.
Google’s current deal with Apple for search is already the focus of a lawsuit by the US Department of Justice. The government has alleged that the companies have operated as a single entity to corner the search market on mobile devices. The pair has justified the arrangement by saying Apple believes Google’s search quality is superior to rivals and that it’s easy to switch providers on the iPhone.