Apple is in talks to use Google's Gemini to power the AI features on the iPhone

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Apple is in discussions to integrate Google’s Gemini artificial intelligence engine into the iPhone, citing people familiar with the matter.
The report stated that the talks are about licensing Gemini for some new features that will be added to the iPhone software this year, but it did not specify the conditions, branding, or implementation strategy of an AI agreement.

Early U.S. trading saw a 6% increase in Alphabet shares while Apple saw a 2.5% increase.
A deal is unlikely to be announced until June, when Apple is scheduled to host its annual developer conference. Additionally, the report states that the iPhone manufacturer recently had discussions regarding the use of its model with ChatGPT maker OpenAI.

To overtake Microsoft-backed OpenAI, Google may be able to extend the use of its AI services to over 2 billion active Apple devices through a potential agreement between the two companies.
Additionally, it might help calm investor concerns about Apple’s sluggish AI app roll-out. This year, a 10% drop in the company’s share price has cost Apple its position as the most valuable company in the world.

With a GenAI partnership, the Alphabet unit may be able to allay concerns that services like ChatGPT could undermine its dominant position in search. The companies have been in partnership for years, and as a result, Google is the default search engine on Apple’s Safari web browser.
However, the deal might also draw closer examination from US authorities, who have already filed a lawsuit against Google because it illegally suppressed competition by giving Apple billions of dollars to keep its search monopoly.

“The strategic partnership between Apple and Google for Gemini is a significant development in Apple’s AI strategy,” commented Daniel Ives, a Wedbush analyst. “It brings together the strengths of both companies to enhance the AI features that Apple is introducing to the market.”

He was referring to Apple’s California headquarters when he said, “This is a major win for Google to get onto the Apple ecosystem and have access to the golden installed base of Cupertino, with clearly a major licence fee attached to this.”
As part of its efforts to increase the use of Gemini following some setbacks during its roll-out, Google teamed up with Samsung, Apple’s rival, in January to implement its genAI technology in the South Korean company’s Galaxy S24 series of smartphones.
Tim Cook, the CEO of Apple, stated last month that the business was “significantly” investing in generative AI and that additional information about how the technology would be used would be released later in the year.
According to the Bloomberg report, Apple is looking for a partner to power genAI features, such as the ability to create images and write essays in response to basic prompts, but it plans to use its own in-house AI models for some new capabilities in its upcoming iOS 18.