Apple Partners with Google for AI Advancements
Apple is turning to Google to enhance its virtual assistant, Siri, and integrate other artificial intelligence features into the iPhone. This partnership was announced in a statement from both tech giants this past Monday, where it was revealed that Apple will utilize Google’s Gemini technology to create a new suite of AI functionalities termed “Apple Intelligence.”
As AI technology rapidly evolves, Apple is striving to make its mark, having teased significant updates for the iPhone planned for 2024. However, many of these features are still in development. Meanwhile, Google and Samsung have already begun implementing AI tools on their devices. Perhaps the biggest point of contention for Apple users has been Siri, with a promised major upgrade that would make her more conversational and capable still unmet.
Interestingly, Google highlighted these shortcomings in advertisements for the latest Pixel phone last summer, which didn’t help Apple’s situation. Faced with these challenges, Apple conceded last year that the Siri improvements would be delayed until 2026.
This partnership is viewed as a significant win for Google, which has been deploying its Gemini-based enhancements across services like its search engine and Gmail. This move also heightens Google’s competition with OpenAI, which has already partnered with Apple to offer its ChatGPT as an option for iPhone users.
In a Monday research note, Wedbush Securities analyst Dan Ives described the Apple deal as a “major validation moment for Google.”
Alphabet Inc., Google’s parent company, is seeing its market valuation edge slightly above Apple, recently achieving a market value of over $4 trillion. Alphabet’s value now stands about $150 billion higher than Apple’s, which had long held the title of the world’s most valuable company until the AI landscape shifted considerably.
This year alone, three additional companies have crossed the $4 trillion threshold, with AI chip maker Nvidia being the first to reach this milestone last July. Although Apple and Microsoft also achieved this feat last year, they are now valued below $4 trillion.
Nvidia had its market value touch $5 trillion briefly in late October, but concerns about potential investment bubbles in the AI sector have led to a reevaluation. Still, with strong demand for its AI chipsets, Nvidia is currently valued at $4.5 trillion.
Since early September, Alphabet’s stock has surged, rebounding following the U.S. government’s unsuccessful effort to dismantle its internet dominance, after last year’s ruling deemed its search engine a monopoly. A federal judge enforced reforms, which many investors saw as relatively lenient, leading to a 57% spike in Alphabet’s stock—adding approximately $1.4 trillion in shareholder wealth.
This ruling also maintains the longstanding partnership between Google and Apple, as Google pays over $20 billion yearly to be the default search engine on Apple devices. This agreement remains intact with some adjustments following the judge’s recent decision.
