Deepwater Asset Management's managing partner Gene Munster thinks that the reported deal between Apple Inc. AAPL and Alphabet Inc. GOOG GOOGL Google to license Gemini AI model is a win-win for both companies.
What Happened: Apple is considering integrating Google’s Gemini, a set of generative AI models, into its new iPhone software features. This move could potentially position Apple as a leader in personalized AI.
Apple’s potential use of Gemini would also be a significant win for Google, as it could result in substantial annual payments from Apple and distribution across approximately 1.4 billion active devices.
While the terms and branding of the potential agreement are yet to be finalized, Munster thinks Apple will "fight" to rebrand it as its own instead of sticking with Google's Gemini.
Regardless of the branding, Munster thinks this news is what Google investors have wanted for the past half year.
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"The potential to license Gemini to $AAPL is the kind of good news $GOOG investors (Deepwater included) have been waiting for the last six months."
Why It Matters: This potential deal between Apple and Google is a significant development in the tech industry.
Both companies have desired a closer partnership in the past, too, with CEOs Tim Cook and Sundar Pichai stating that they wanted to "work as one company."
This potential collaboration could raise eyebrows among antitrust regulators, given the companies’ status as direct rivals with competing smartphone operating systems.
Google’s Gemini AI model is a product of the company’s ongoing efforts to compete with Apple in the AI space. Meanwhile, Apple has been quietly acquiring AI startups to bolster its AI capabilities, with a particular focus on generative AI.
The potential licensing of Gemini by Apple is a clear indication of the increasing importance of AI in the tech industry and the ongoing competition between Apple and Google in this space.
Price Action: At the time of writing, Apple's stock was trading 1.44% high, while Alphabet Inc Class A stock was up 6.88%, 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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