Written by Martin Coulter
(Reuters) – Apple is in talks to incorporate Google's Gemini artificial intelligence engine into the iPhone, Bloomberg News reported on Monday, citing people familiar with the matter.
The report said the talks will license Gemini for several new features coming to iPhone software this year, adding that the terms and branding of the AI deal or how it will be implemented have not yet been determined.
Alphabet shares rose more than 6% in early U.S. trading, while Apple rose 2.5%.
Any deal is unlikely to be announced until June, when Apple is scheduled to hold its annual developer conference, and the iPhone maker also recently held talks with ChatGPT maker OpenAI about using its models.
Apple, Alphabet Inc.'s Google and OpenAI did not immediately respond to Reuters' requests for comment.
A potential agreement between the companies could help Google expand the use of its AI services to more than 2 billion active Apple devices and accelerate the search giant's efforts to catch up with Microsoft-backed OpenAI. There is.
It could also help ease investors' fears about the slow rollout of AI apps by Apple, whose stock has fallen 10% this year, making it the world's most valuable company.
The two companies have a long-standing partnership that makes Google the default search engine in Apple's Safari web browser, but the genAI partnership raises concerns about whether services like ChatGPT could threaten the company's search dominance. This could help Alphabet's division overcome that concern.
But the deal could also invite increased scrutiny from U.S. regulators, who are suing Google for illegally stifling competition by paying Apple billions of dollars to maintain its search monopoly. .
Wedbush analyst Daniel Ives said: “This strategic partnership is a missing piece in Apple's AI strategy, and joining forces with Google for Gemini will help Apple bring some of the AI to market. It strengthens functionality.”
“This is a big win for Google to get into the Apple ecosystem and access the golden installed base in Cupertino, which obviously comes with a hefty license fee,” he said, referring to Apple's California headquarters.
In January, Google announced that it would be working with Apple to bring its genAI technology to the South Korean company's Galaxy S24 series of smartphones as part of an effort to boost the use of Gemini, following several failures during Gemini's rollout. It has partnered with rival Samsung.
Apple CEO Tim Cook said last month that the company is investing “significantly” in generative AI and will reveal more about its plans to commercialize the technology later this year.
According to a report from Bloomberg, Apple plans to use in-house developed AI models for several new features in the upcoming iOS 18, including the ability to create images based on simple prompts and write essays. The company is looking for a partner to strengthen its business.
(Reporting by Jahnavi Nidumolu and Aditya Soni in Bengaluru; Editing by Savio D'Souza, Janene Venkatraman, Varun HK and Susan Fenton)
