Apple will rely on Google to help finish its efforts to smarten up its virtual assistant Siri and bring other artificial intelligence features to the iPhone as the trendsetting company plays catch up in technology’s latest craze.
The deal allowing Apple to tap into Google’s AI technology was disclosed Monday in a joint statement from the Silicon Valley powerhouses. The partnership will draw upon Google’s Gemini technology to customize a suite of AI features dubbed “Apple Intelligence” on the iPhone and other products.
After Google and others took the early lead in the AI race, Apple promised to plant its first big stake in the field with an array of new features that were supposed to be coming to the iPhone in 2024 as part of a ballyhooed software upgrade.
But many of Apple’s AI features remain in the development phase, while Google and Samsung have been rolling out more of the technology on their own devices. One of the most glaring AI omissions on the iPhone has been a promised overhaul of Siri that was supposed to transform the often-confused assistant into a more conversational and versatile multitasker.
Google even subtly mocked the iPhone’s AI shortcomings in ads promoting the release of its latest Pixel phone last summer.
Apple’s AI missteps prompted the Cupertino, California, company to acknowledge last year that its Siri upgrade wouldn’t happen until some point during 2026.
Getting Apple to endorse its AI implicitly represents a coup for Google, which has been steadily releasing more features built on its Gemini technology in its search engine and Gmail. The progress has intensified Google’s competition with OpenAI and its ChatGPT chatbot, which already has a deal with Apple that makes it an option on the iPhone.
Wedbush Securities analyst Dan Ives hailed the Apple deal as a “major validation moment for Google,” in a Monday research note.
Google’s AI inroads have helped its corporate parent, Alphabet Inc., become slightly more valuable than Apple in the assessment of investors. Alphabet marked a milestone Monday when it surpassed a market value of $4 trillion for the first time during early morning trading before slipping back below that threshold later in the session.
Even so, Alphabet’s market value remained about $150 billion above Apple, which for years ranked as the world’s most valuable company 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 values of those two longtime rivals are now below $4 trillion.
Nvidia’s market value briefly topped $5 trillion in late October, before backtracking amid recurring worries that the hundreds of billions of dollars pouring into AI technology may be creating an investment bubble that will eventually burst. With its chipsets designed for AI still in high demand, Nvidia remains atop the heap with a $4.5 trillion market value.
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 branded its ubiquitous search engine an illegal monopoly.
In an effort to prevent further abuses, a federal judge overseeing the case ordered a shake-up that investors widely interpreted as a relative slap on the wrist, resulting in a 36% increase in Alphabet’s stock price since then that has created an additional $1.4 trillion in shareholder wealth.
The ruling also left the door open for a long-running alliance in search between Google and Apple. Google pays Apple more than$20 billion annually to be the preferred search engine on the iPhone and other Apple products — an arrangement that is still allowed with a few modifications under the judge’s decision in the search case.
