Several media reports say Apple Inc. (NASDAQ: AAPL) may license Google’s Gemini for generative AI on iPhones. Bloomberg writes, “The two companies are in active negotiations to let Apple license Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year.” It could be a win-win. Google’s product is also seen behind the offerings by Microsoft and AI leader OpenAI. Apple has become viewed as a hardware company without advanced AI software products.
Apple CEO Tim Cook recently said AI features would be available on iOS, the company’s operating system. That means they would run on iPhones, iPads, Macs and the Apple Watch. Apple has one huge advantage. It has 2.2 billion active devices in the world. It could download its AI feature on hundreds of millions of these with a single iOS upgrade. (Five reasons to avoid Apple products today.)
Google’s generative AI has had problems of its own. Its image-creating feature produced images that were not historically accurate. Its results for user questions about elections inside and outside the United States were also questioned.
Apple and Google’s parent, Alphabet Inc. (NASDAQ: GOOGL), could both use good news. While other mega-cap tech stocks like Microsoft have had strong years so far in the stock market, Apple is down 10% year to date, and Alphabet is flat. The S&P 500 is up 7% over the same period.
Even if Apple and Alphabet form a partnership, there is no guarantee that their AI product will be considered as strong as that of competitors. The partnership will have looked good on paper but faltered based on execution.
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