Benzinga - by Ananya Gairola, Benzinga Staff Writer.
In a potential game-changing move, Apple Inc. (NASDAQ:AAPL) is reportedly in discussions to integrate Alphabet Inc.’s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google Gemini into the iPhone.
What Happened: Apple is in active negotiations with Google to license Gemini, a set of generative AI models, to power new iPhone software features, reported Bloomberg on Monday, citing people familiar with the situation. This potential deal would build on the existing search partnership between the two tech giants.
The Cupertino, California-based tech giant is also said to have discussed a similar deal with ChatGPT-parent OpenAI. According to the sources, the terms and branding of the AI agreement, as well as its implementation, are yet to be finalized.
According to Apple analyst Mark Gurman, the move could give Google a significant edge, with billions of potential users. However, it could also draw further antitrust scrutiny for both companies. Moreover, it could also indicate that Apple’s progress in AI may not be as advanced as anticipated.
The Tim Cook-led company has reportedly been preparing new capabilities for iOS 18, the next version of its operating system, based on its own AI models. However, these enhancements will focus on features that operate on its devices rather than those delivered via the cloud. As a result, Apple is seeking a partner to handle the heavy lifting of generative AI, the report noted.
Apple has been testing its own large language model, codenamed Ajax, since early last year. However, the users said, its technology remains inferior to tools from Google and other rivals, making a partnership seem like the better option.
Apple, Google, and OpenAI did not immediately respond to Benzinga’s request for comments.
Why It Matters: If the deal goes through, it would be Google’s highest-profile partnership with Gemini to date and could significantly boost the company’s AI efforts. However, given the ongoing antitrust scrutiny of the companies’ existing search partnership, it would also likely attract regulatory attention.
While discussions between Apple and Google continue, the likelihood of an announcement before June seems low, as Apple typically unveils developments during its annual Worldwide Developers Conference. There’s a possibility that no agreement will be reached, or Apple will decide to opt for an alternative generative AI provider, such as OpenAI.
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Alternatively, Apple might consider engaging multiple partners, akin to its approach to search in its web browser. Notable among other generative AI providers is Anthropic, known for its chatbot named Claude.
Meanwhile, Google’s AI efforts have not been without controversy. Last month, users discovered that the Gemini system sometimes inaccurately handled the race of individuals depicted in AI-generated images. This issue led to a temporary pause in image generation, with Google’s CEO Sundar Pichai calling the problem “completely unacceptable.”
Earlier this month, Google also enforced restrictions on the types of election-related questions that Gemini, its AI chatbot, could respond to, as part of a broader effort to prevent AI from stirring up controversies during election periods.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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