Tech giant Apple (AAPL) is planning to pay about $1 billion a year to use Google’s (GOOGL) advanced 1.2 trillion-parameter Gemini AI model, which is far more than what Apple currently uses. According to Bloomberg, this move would support a major upgrade to Siri, Apple’s voice assistant, that is expected next spring. After testing other AI models, such as ChatGPT and Claude, Apple chose Google’s Gemini as the best short-term option. The deal is still being finalized, but it will let Apple integrate Gemini into Siri while it continues to work on its own in-house AI models.
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Under the agreement, Google’s model will help Siri understand complex tasks and summarize information, while Apple’s own models will still power some other features. To protect privacy, the AI will run on Apple’s private servers, not Google’s. Apple had also considered integrating Gemini directly into Siri as a chatbot, but decided against it for now. Nevertheless, this move highlights Apple’s need to catch up in AI, especially since companies like Samsung (SSNLF) are already using Google’s AI.
Still, Apple wants to eventually move away from Google’s model. Therefore, its internal team is building a trillion-parameter AI model that could be ready for consumers next year. Interestingly, Apple believes that it can reach Gemini’s quality, but as Google continues to improve its own model, it will be tough to do so. Separately, in China, where Google services are banned, Apple is developing a separate version of Siri by using its own models along with a government-approved filter from Alibaba (BABA). It’s also looking into a possible AI partnership with Baidu (BIDU).
Which Tech Stock Is the Better Buy?
Turning to Wall Street, out of the two U.S. tech stocks mentioned above, analysts think that GOOGL stock has more room to run than AAPL. In fact, Google’s price target of $309.15 per share implies almost 9% upside versus Apple’s 6.2%.
