Apple bets on Google’s Gemini in $1B deal to rebuild Siri, close its AI gap: report
News Summary
Apple Inc. is finalizing a $1 billion-a-year deal with Alphabet Inc.'s Google to use its powerful Gemini AI model to overhaul its Siri voice assistant. This marks Apple's most significant reliance on external AI technology to date and represents one of the largest AI licensing arrangements in the technology industry. The upgraded Siri, codenamed "Glenwood" and expected with iOS 26.4 in 2026, will leverage Gemini for advanced tasks like summarizing information and planning actions, while Apple's proprietary models will handle basic functions. The system will run on Apple's Private Cloud Compute servers to keep user data isolated from Google's infrastructure. This move underscores Apple's urgency to catch up in the rapidly advancing AI race, as competitors like Google (which integrated Gemini into Google Assistant), Amazon (upgraded Alexa earlier in 2025), and Microsoft (expanding Copilot features with OpenAI) have accelerated their AI rollouts. Analysts view this as a "pragmatic shift" in Apple's strategy, buying the company time to develop stronger internal systems. For Google, the partnership cements its position as a leading AI infrastructure provider. Additionally, Google is deepening its investment in AI startup Anthropic and is nearing completion of its $32 billion acquisition of cloud security firm Wiz.
Background
Siri, first introduced in 2011, has long been criticized for lagging behind rival digital assistants from Google and Amazon. While Apple and Google have collaborated before, notably on the deal making Google the default search engine on Safari, this AI partnership represents a significant and rare reliance on external technology for Apple's AI development. Earlier inconclusive discussions between the companies regarding directly integrating Gemini into Siri as a chatbot failed to materialize. Apple had already introduced a ChatGPT option in Siri earlier this year, and CEO Tim Cook indicated that users could expect additional chatbot integrations in future versions. Meanwhile, Google integrated Gemini into its own Assistant last year, Amazon introduced an AI-driven upgrade to Alexa earlier in 2025, and Microsoft continues to expand its partnership with OpenAI to embed Copilot features across its Windows and Office applications.
In-Depth AI Insights
What does this strategic pivot reveal about Apple's long-term AI ambitions and competitive positioning? - Apple's long-standing "not invented here" syndrome is eroding under competitive pressure in AI, signaling a pragmatic shift from internal purity to market relevance. - This deal buys Apple time to develop its own foundational models but also deepens its reliance on a direct competitor, potentially creating a strategic vulnerability down the line. - The emphasis on privacy (via Private Cloud Compute) is a key differentiator Apple is attempting to maintain, but the underlying model's power still originates from Google, somewhat diluting its independence. What are the implications for Google's AI business model and valuation as an infrastructure provider? - This deal solidifies Google's position as a leading AI infrastructure provider, expanding its business model beyond consumer products to high-value enterprise-grade solutions. - High-value licensing agreements like this not only generate new revenue streams but also validate Gemini's technical superiority, potentially driving further enterprise adoption. - Providing underlying compute and model capabilities is emerging as a lucrative and strategically vital business in the AI arms race, which could lead to a re-evaluation of Google's AI division's valuation. How will Apple's collaboration with Google impact the AI competitive landscape among U.S. tech giants? - This partnership signals a complex "co-opetition" dynamic among U.S. tech giants in AI, where traditional rivals become interdependent for foundational AI capabilities. - Apple's move may prompt other tech companies without robust in-house AI models to seek similar partnerships with leading AI model providers (e.g., Google, OpenAI, Anthropic), accelerating industry-wide AI adoption. - In the long run, this could lead to an oligopoly of AI technology providers, with a few companies controlling core AI model technology and serving the broader industry, posing potential risks for companies unable to develop large-scale AI models independently.