Apple will rely on Google to complete its efforts to improve its Siri virtual assistant and bring other artificial intelligence features to the iPhone, as the trendsetting company catches up on the latest technology craze.
The deal that allows Apple to use Google’s AI technology was announced Monday in a joint statement from the Silicon Valley powerhouses. The partnership will use Google’s Gemini technology to power a suite of AI features on the iPhone and other products called “Apple Intelligence.”
After Google and others took an early lead in the AI race, Apple promised to establish its first major stake in the field with a series of new features coming to the iPhone in 2024 as part of a software upgrade.
But many of Apple’s AI features are still in the development stages, while Google and Samsung have rolled out more of the technology on their own devices. One of the most glaring AI omissions on the iPhone is a promised overhaul of Siri, which was supposed to transform the oft-confused assistant into a more talkative and versatile multitasker.
Google even subtly mocked the iPhone’s AI shortcomings last summer in ads promoting the release of its latest Pixel phone.
Apple’s AI missteps prompted the Cupertino, California-based company last year to acknowledge that the Siri upgrade wouldn’t happen until sometime in 2026.
Getting Apple to endorse its AI implicitly represents a coup for Google, which is steadily releasing more features built on its Gemini technology in its search engine and Gmail. The advances have intensified Google’s competition with OpenAI and its ChatGPT chatbot, which already has a deal with Apple making it an option on the iPhone.
Wedbush Securities analyst Dan Ives called the Apple deal an “important validation moment for Google” in a research note on Monday.
Google’s AI invasion has made its parent company, Alphabet Inc., slightly more valuable than Apple in investor ratings. Alphabet marked a milestone Monday when it surpassed a $4 trillion market value for the first time in early morning trading, before falling back below that threshold later in the session.
Still, Alphabet’s market value remained about $150 billion higher than that of Apple, which was the world’s most valuable company for years before the rise of AI changed the stakes.
Three other companies have joined the $4 trillion club in the past year, with AI chipmaker Nvidia becoming the first last July. Apple and Microsoft also broke the barrier last year, although the market value of these two old rivals is now under $4 trillion.
Nvidia’s market value briefly topped $5 trillion in late October before retreating amid recurring concerns that the hundreds of billions of dollars pouring into AI technology could create an investment bubble that will eventually burst. Because the chipsets designed for AI are still in high demand, Nvidia remains at the top with a market value of $4.5 trillion.
Alphabet’s stock price has been on a tear since early September, when Google dodged the U.S. government’s attempt to break up its Internet empire following a ruling last year that declared the ubiquitous search engine an illegal monopoly.
In an effort to prevent further abuse, a federal judge overseeing the case ordered a shakeup that investors broadly interpreted as a relative slap on the wrist, resulting in Alphabet’s stock price rising 36% since then, adding an additional $1.4 trillion in shareholder wealth.
The ruling also left the door open for a long-running search alliance between Google and Apple. Google pays Apple more than $20 billion annually to be the search engine of choice on the iPhone and other Apple products — an arrangement that is still allowed with a few tweaks under the judge’s decision in the search case.
