Alphabet Shares up 4% on Report Apple in Talks to Let Google’s Gemini Power iPhone AI Features

Apple is to build ties with the world’s biggest search engine, Google, to harness the power of Gemini in its upcoming iPhone series, aiming to offer innovative AI features.
According to Bloomberg News, Apple opened up regarding its talks with Google about integrating the Gemini AI Engine into its upcoming iPhone lineup. The discussions are about licensing Gemini for new AI features coming to iPhone iOS this year. However, the terms or branding of this collaboration and how AI will be incorporated are yet to be decided.
After this news surfaced, Alphabet shares spiked more than 4% in the US, while Apple shares jumped 2.5%. As per the report, Apple will not announce any news related to the partnership until June. The company also recently talked with OpenAI about using the ChatGPT model.
However, the partnership among the world’s tech giants could empower Google to expand its AI services to more than 2 billion active Apple users, boosting efforts to compete with Microsoft’s AI model (MSFT.O), backed by OpenAI.
Apple has a decade-long partnership with Google that makes it the default search engine on Apple’s web browser, Safari, and a GenAI deal may help the Alphabet unit overcome the fear that AI tools like ChatGPT could threaten its search dominance. However, Apple’s collaboration with Google can expose it to the scrutiny of US regulators, who have sued Google for manipulating the competition by paying billions of dollars to Apple, aiming to retain its search dominance.
“This strategic partnership is a missing piece in Apple’s AI strategy. It combines forces with Google for Gemini to power some of the AI features Apple is bringing to market,” said Daniel Ives, an analyst at Wedbush.
“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 license fee attached to this,” he said, referring to Apple’s California headquarters.
In January 2024, Google partnered with Apple’s biggest competitor, Samsung, offering its genAI technology to power the “Galaxy S24 series.” 
Apple plans to reveal more about its plan for genAI during its Worldwide Developers Conference when it will also share news regarding the iPhone update, iOS 18. During its February annual shareholder meeting, Apple CEO Tim Cook said the company is “investing significantly” in AI. “Later this year, I look forward to sharing with you the ways we will break new ground in generative AI, another technology we believe can redefine the future,” Cook said.
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