Apple Inc. is in talks to build Google’s Gemini artificial intelligence engine into the iPhone, according to people familiar with the situation, setting the stage for a blockbuster agreement that would shake up the AI industry.
The two companies are in active negotiations to let Apple licence Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year, said the people, who asked not to be identified because the deliberations are private. Apple also recently held discussions with OpenAI and has considered using its model, according to the people.
If a deal between Apple and Google comes to fruition, it would build upon the two companies’ search partnership. For years, Alphabet Inc.’s Google has paid Apple billions of dollars annually to make its search engine the default option in the Safari web browser on the iPhone and other devices. The two parties haven’t decided the terms or branding of an AI agreement or finalised how it would be implemented, the people said.
A deal would give Gemini a key edge with billions of potential users. But it also may be a sign that Apple isn’t as far along with its AI efforts as some might have hoped — and threatens to draw further antitrust scrutiny of both companies.
Apple is preparing new capabilities as part of iOS 18 — the next version of the iPhone operating system — based on its own AI models. But those enhancements will be focused on features that operate on its devices, rather than ones delivered via the cloud. So Apple is seeking a partner to do the heavy lifting of generative AI, including functions for creating images and writing essays based on simple prompts.
Spokespeople for Apple and Google declined to comment. OpenAI didn’t immediately respond to a request for comment.
Since early last year, Apple has been testing its own large language model — the technology behind generative AI — codenamed Ajax. Some employees also have been trying out a basic chatbot dubbed Apple GPT. But Apple’s technology remains inferior to tools from Google and other rivals, according to the people, making a partnership look like the better option.
A deal with Apple would be Google’s highest-profile partnership for Gemini to date and could be a major boon for the company’s AI efforts. Apple has more than 2 billion devices in active use that could potentially become home to Google Gemini later this year. In January, Samsung Electronics Co. rolled out new smartphones with AI features powered by Gemini.
But a partnership between the two Silicon Valley giants would likely draw the eye of regulators. Google’s current deal with Apple for search is already the focus of a lawsuit by the US Department of Justice. The government has alleged that the companies have operated as a single entity to corner the search market on mobile devices. The pair has justified the arrangement by saying Apple believes Google’s search quality is superior to rivals and that it’s easy to switch providers on the iPhone.
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The arrangement between Apple and Google is also under fire in the European Union, which is forcing Apple to make it easier or consumers to change their default search engine away from Google. As regulatory pressure grows and artificial intelligence becomes more prevalent, the current search deal could ultimately be less lucrative for both companies. It’s possible that a new agreement around AI could help make up for that.
Microsoft Corp.’s funding of OpenAI has drawn its own regulatory scrutiny, with the US Federal Trade Commission examining whether that deal may violate antitrust laws. While the talks between Apple and Google remain active, it’s unlikely that any deal would be announced until June, when the iPhone maker plans to hold its annual Worldwide Developers Conference.
It’s possible that the companies don’t reach an agreement or Apple ultimately chooses to go with another generative AI provider, like OpenAI. Or Apple could theoretically tap multiple partners, as it does with search in its web browser. Other generative AI providers include Anthropic, which offers a chatbot called Claude.
Gemini has captured the imagination of consumers and businesses, but it hasn’t been without controversy. Last month, users discovered that the system sometimes inaccurately handled the race of individuals depicted in AI-generated images. Sundar Pichai, Google’s chief executive officer, called the issue “completely unacceptable,” and image generation was paused.
Tim Cook, Apple’s CEO, has promised a major AI announcement this year. He told investors the company would release transformative features that “break new ground.” The plan is especially important as investors look for new growth sources at the iPhone maker, which cancelled a project to develop a self-driving car earlier this year. It moved some engineers on that project to its artificial intelligence division.
Last year, Cook said he personally uses OpenAI’s ChatGPT but indicated that there were “a number of issues that need to be sorted.” He promised that new AI features would come to Apple’s platforms on a “very thoughtful basis.” By outsourcing the generative AI features to another company, Cook is also potentially lessening the liability for its platform. The generative AI features under discussion would theoretically be baked into Siri and other apps.
New AI capabilities based on Apple’s homegrown models, meanwhile, would still be woven into the operating system. They’ll be focused on proactively providing users with information and conducting tasks on their behalf in the background, people familiar with the matter said.
