In a significant strategic shift, Apple has entered into a multi-year agreement with Google to base its future AI foundation models on Google's Gemini technology. The partnership was announced in a joint statement, with Apple stating that "after careful evaluation, Apple determined that Google's AI technology provides the most capable foundation for Apple Foundation Models."
The deal follows a weak reception to Apple's own AI offering, Apple Intelligence, which launched in 2024 with limited capabilities. This, combined with executive departures to rivals like Meta, left Apple facing a critical decision in the accelerating AI race. The move is seen as a pragmatic reset, with Apple leveraging proven external technology rather than attempting to build a standalone competitor from scratch.
Apple's Senior Vice President of Services, Eddy Cue, reportedly sees Gemini as the "winner," a sentiment highlighted by CNBC's Jim Cramer. Cramer argued that selling Google stock amid this development would be "plain stupid," noting that Gemini's multimodal capabilities position Google at the center of the global AI arms race. Bloomberg previously reported that Apple would pay Google roughly $1 billion annually for access to Gemini, though official financial terms of the new deal were not disclosed.
Despite the reliance on Google's technology, Apple emphasized its commitment to privacy, stating that "Apple Intelligence will continue to run on Apple devices and Private Cloud Compute, while maintaining Apple's industry-leading privacy standards." It remains unclear when the integration will take effect or if Gemini branding will appear on Apple devices.
The market reacted swiftly to the news. Google's parent company, Alphabet, briefly crossed a $4 trillion market capitalization, as the deal solidifies Gemini's role as a core AI engine for both major mobile operating systems. The partnership is viewed as a major validation of Gemini's technology and a turning point for both companies in the next wave of artificial intelligence.
