Apple Inc. AAPL has reportedly not picked a winner yet between Alphabet Inc.'s GOOGL GOOGL Google and Microsoft Corp.-backed MSFT OpenAI to incorporate their large-language models into the iPhone’s AI features.
What Happened: The ongoing talks between Apple, Google, and OpenAI are expected to result in new AI features for the iPhone. However, no formal announcement is anticipated until the summer, reported Bloomberg.
Earlier this week, it was revealed that Apple was in talks with Google to integrate its Gemini AI engine into the iPhone as part of iOS 18. Apple’s CEO, Tim Cook, has promised that the company will “break new ground” in AI this year, with iOS 18 expected to play a significant role.
Apple’s internal work is reportedly focused on smaller-scale AI features that operate on-device and do not require an internet connection.
Google, Apple and OpenAI did not immediately respond to Benzinga's request for comment.
To enable more powerful cloud-based generative AI features, such as creating images and writing essays based on single prompts, Apple is seeking a partner with the necessary large-scale hardware infrastructure and compute capabilities already in place.
It is expected that Siri will benefit from the artificial intelligence improvements that Apple plans to bring in iOS 18.
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Why It Matters: The ongoing talks between Apple and Google to license Gemini AI models for future iPhones were first reported on March 18. This potential deal would build on the existing search partnership between the two tech giants.
Deepwater Asset Management’s managing partner Gene Munster believes that the reported deal between Apple and Google to license the Gemini AI model is a win-win for both companies, but more so for Google, as it could result in substantial annual payments from Apple and distribution across approximately 1.4 billion active devices.
Wedbush’s Dan Ives also believes that a potential partnership between Apple and Google could be a game-changer for both companies. He described it as a crucial element in Apple's AI strategy, which could significantly enhance the company's AI capabilities.
Another report suggests that Apple’s in-house AI features for iOS 18 are codenamed “Project Graymatter,” separate from Google’s Gemini features being discussed.
Price Action: At the time of writing, Apple's stock was down 0.71% compared to the previous close of $178.67 on Wednesday, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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