Apple in Talks to Integrate Google’s AI into iPhone: Potential Game-Changer for Tech Giants

According to a report from Bloomberg News on Monday, Apple (AAPL.O) is currently engaged in discussions to integrate Google’s Gemini artificial intelligence engine into the iPhone. People familiar with the matter revealed that these negotiations involve licensing Gemini for upcoming features in the iPhone software slated for release this year. However, specifics regarding the terms of the agreement, branding, or implementation methods have not yet been finalized.

An announcement regarding any potential deal is not expected until June, coinciding with Apple’s annual developer conference. Additionally, Apple has reportedly held discussions with OpenAI, the creator of ChatGPT, regarding the utilization of its model.

Both Apple and Google’s parent company, Alphabet (GOOGL.O), declined to comment on the matter when approached by Reuters. Following this news, Alphabet’s shares saw a 3% rise in premarket trading in the U.S., while Apple experienced a 0.5% increase.

Should a deal be reached, it could enable Google to extend its AI services to over 2 billion active Apple devices, supporting the search giant’s efforts to compete with OpenAI, backed by Microsoft (MSFT.O). This move might also address concerns among investors regarding Apple’s relatively slow adoption of AI applications, contributing to a 10% decline in its shares this year.

The longstanding partnership between Apple and Google, which currently makes Google the default search engine on Apple’s Safari web browser, could further benefit from a collaboration in AI. However, such an agreement may draw increased attention from U.S. regulators, who have previously sued Google over allegations of anticompetitive practices related to its search dominance.

Google’s recent collaboration with Apple’s competitor, Samsung, to integrate genAI technology into the Galaxy S24 series of smartphones underscores its efforts to expand the use of Gemini following initial challenges during its rollout.

Apple’s CEO, Tim Cook, recently emphasized the company’s significant investment in generative AI and hinted at unveiling further plans for its implementation later this year. While Apple reportedly intends to utilize its own AI models for certain features in the upcoming iOS 18, it seeks a partner to power genAI functionalities, including image creation and essay writing based on simple prompts, as outlined in the Bloomberg report.