Apple plans to use Google’s Gemini artificial intelligence model to power its updated version of Siri, which is set to launch later this year, the two companies announced Monday.
“After careful evaluation, Apple determined that Google’s Al technology provides the most capable foundation for Apple Foundation Models and is excited about the innovative new experiences it will unlock for Apple users,” Apple and Google said in a statement. The two companies noted they have entered into a multi-year contract whereby Apple will use Google’s Gemini model and cloud computing technology to power AI features.
The move could help Apple accelerate the release of its more advanced, AI-powered version of its Siri voice assistant, which was delayed after first being teased at the company’s 2024 Worldwide Development Conference. The delay has contributed to concerns that Apple is behind fellow tech giants in AI development.
The agreement could indicate that Apple continues to struggle with developing a competitive, in-house AI model, but the news is being viewed by Wall Street as a positive sign for the iPhone maker. Apple is betting on added AI capabilities, including the updated Siri, to boost device sales after several rocky years for the iPhone.
It’s also a major win for Google in the ongoing Silicon Valley battle to create the most capable and widely used AI model. Apple has also partnered with OpenAI to use ChatGPT to power some AI features, but the deal announced Monday puts Gemini at the center of Apple’s future AI strategy. It was not immediately clear whether and how Apple’s deal with Google will affect the integration of ChatGPT into some of its AI features on iPhone.
“This is what the Street has been waiting for with the elephant in the room for Cupertino revolving around its invisible AI strategy, but we believe this is an incremental positive to both” Apple and Google, Wedbush tech analyst Dan Ives said in emailed commentary.
The financial terms of the agreement were not disclosed. The agreement was first reported by CNBC.
Bloomberg reported in the fall that Apple was planning to pay around $1 billion per year to incorporate Gemini into the updated version of Siri, citing unnamed people familiar with the matter. The report also noted that Apple had previously considered partnering with other AI firms on the project, including OpenAI and Anthropic.
Apple said Monday that under the new agreement, its Apple Intelligence AI features will continue to run either on users’ devices or in a secure cloud, to protect users’ personal data.
Shares of Apple (AAPL) and Google (GOOGL) were up less than 1% midday on Monday. The stock bump pushed Google’s market cap up to $4 trillion for the first time in intraday trading on Monday, making it the fourth publicly traded company to reach the milestone after Nvidia, Microsoft and Apple did so last year.
Apple is expected to post iPhone sales growth at around 11% year-over-year when it reports earnings for the December quarter later this month, according to analyst estimates compiled by FactSet. The company’s total quarterly profits are expected to grow by nearly 8% to more than $39 billion.
Source: CNN
--Agencies
