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Apple in Talks to Incorporate Google’s Gemini AI into iPhone

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Apple Inc. (AAPL.O) is reportedly in discussions to integrate Google’s Gemini artificial intelligence (AI) engine into its flagship product, the iPhone. A potential partnership between these tech giants could revolutionise the smartphone industry and set new standards in AI-powered capabilities.

The dialogue centres around licensing Google’s Gemini AI for various new features in the upcoming iPhone software update. However, key elements such as the AI agreement’s terms, branding, and implementation strategy remain undecided. 

Apple’s Annual Developers Conference

The tech world eagerly anticipates June, when Apple holds its annual developers conference. Any potential partnership announcement is expected around this time. Interestingly, the iPhone manufacturer recently discussed employing its model with OpenAI, the creator of ChatGPT. Neither Apple, Google, nor OpenAI have responded to requests for comment.

The Potential Impact of the Deal on Tech Stocks

News of the potential deal has already impacted the stock market, with Alphabet shares (Google’s parent company) rising 3% in premarket U.S. trading and Apple’s shares increasing 0.5%. 

With over 2 billion active Apple devices worldwide, a deal between Apple and Google could significantly widen the adoption of Google’s AI services. This would bolster Google’s attempts to rival Microsoft-backed OpenAI in the ever-competitive AI arena.

Implications for Apple’s AI Strategy

This potential agreement may alleviate investors’ concerns regarding Apple’s sluggish deployment of AI applications. These fears have contributed to Apple’s 10% share decline this year, which has resulted in its loss of status as the world’s most valuable company. 

Apple and Google have maintained a long-standing partnership. Google is the default search engine on Apple’s Safari web browser. A potential collaboration in AI could help Google mitigate concerns that AI services, like ChatGPT, could undermine its search engine dominance.

Regulatory Scrutiny and Competitive Alliances

However, this agreement could also attract increased scrutiny from U.S. regulators. Google has previously been sued for allegedly suppressing competition by paying billions to Apple to preserve its search monopoly. 

In a similar vein, Google partnered with Samsung, Apple’s rival, in January to integrate its genAI technology into Samsung’s Galaxy S24 smartphone series. This move was part of Google’s strategy to amplify the use of Gemini following some initial hiccups during its launch.

Apple’s Investment in Generative AI

Apple CEO Tim Cook recently stated that the company invests heavily in generative AI. Later this year, more details about Apple’s strategy to use this technology are expected. 

It is also indicated that Apple plans to use its in-house AI models for new capabilities in its forthcoming iOS 18. However, it also seeks a partner to power genAI features, such as creating images and writing essays based on simple prompts. 

The potential integration of Google’s Gemini AI into the iPhone could herald a new era in smartphone technology. As the tech giants navigate regulatory challenges and competitive alliances, the industry eagerly awaits the outcome of these discussions.

The partnership could significantly impact the tech industry and redefine the user experience with AI-powered capabilities.

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