3/18/2024

Apple is in negotiations with Google

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Key points:

  • Apple and Google are in talks to integrate Gemini’s AI engine into the iPhone.
  • The deal is expected to be announced no earlier than June 2023.
  • Potential benefits include strengthening Google’s position in competition with Microsoft.

Negotiations are currently underway between Apple and Google to integrate Google’s Gemini artificial intelligence engine into the iPhone. According to reports, discussions are underway to license Gemini to implement some of the new features that will be available in iPhone software later this year.

It is worth noting that the terms of the agreement regarding both artificial intelligence and its branding, as well as the exact methods of its implementation, have not yet been determined.

The deal between Google and Apple

The announcement of the deal, if it happens, is expected to be made no earlier than June, when Apple traditionally holds its annual developer conference. It’s worth noting that Apple has also recently been in talks with OpenAI, the developer of ChatGPT, about the possibility of using their model.

Amid news of a potential deal with Google, Alphabet shares rose 3% in pre-market trading in the US, while Apple shares rose 0.5%.

A potential transaction between the companies could have a number of positive consequences. First, it will allow Google to expand the use of its AI services on more than 2 billion active Apple devices, which will strengthen the company’s position in the competition with Microsoft.

It could also help allay investor concerns about Apple’s slow adoption of AI applications, which has caused the company’s shares to fall 10% this year and lose its status as the world’s most valuable company.

Does the deal have risks?

Apple and Google have been collaborating for a long time. Google is the default search engine in Apple’s Safari web browser. Collaborating with genAI could help Google ease concerns that services like ChatGPT could threaten Google’s dominance in the search space.

However, this agreement may attract the attention of US regulators, who have already initiated an antitrust case against Google. The lawsuit says Google illegally suppressed competitors by paying Apple billions of dollars to maintain its search monopoly.

Other Google deals

In January, Google already entered into a partnership with Samsung, an Apple competitor. As part of this collaboration, genAI technology will be integrated into the Galaxy S24 series of smartphones. This will allow Google to expand its use of Gemini technology.

Apple CEO Tim Cook said last month that the company is investing heavily in generative artificial intelligence. Apple will announce its plans to introduce this technology later this year.

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