Apple Bets on Google’s Gemini to Anchor Its AI Future
The deal deepens ties between the tech juggernauts as Google’s parent, Alphabet, briefly touches a $4 trillion valuation.
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Apple has struck a multi-year agreement with Google to use its (generative AI) Gemini models to power a revamped version of Siri, a move that significantly strengthens Alphabet’s position in the intensifying global AI race and marks a major strategic win over rival OpenAI.
Under the deal, Apple will rely on Google’s Gemini models as the foundation for its next-generation Apple Intelligence features, including a more capable Siri, scheduled to launch later this year. Apple said the decision followed extensive internal evaluations that concluded Google’s technology offered the most advanced and scalable AI foundation for its ecosystem of more than two billion active devices.
The agreement deepens an already complex relationship between the two technology giants, whose partnership spans search, advertising, and now AI. While Apple integrated ChatGPT into its devices in late 2024 to handle complex queries, the company indicated that the existing OpenAI integration will remain unchanged for now, positioning Gemini as a complementary system rather than a replacement.
For Alphabet, the Siri deal represents a decisive endorsement of its AI strategy at a time when investor confidence has surged. Shares of Alphabet rose as much as 1.7% on Monday to a record high before paring gains, briefly pushing the company’s market valuation to $4 trillion. Alphabet recently overtook Apple in market capitalization for the first time since 2019, becoming the world’s second most valuable company.
The momentum reflects a broader reassessment of Alphabet’s competitive standing after concerns that it had squandered an early AI lead. Those fears have eased as Google Cloud has emerged as a key growth engine, with revenue rising 34% in the third quarter and backlog climbing to $155 billion.
Demand has also surged for Google’s in-house AI chips, now rented to external customers, accelerating the cloud unit’s expansion.
Gemini’s growing adoption builds on Google’s existing foothold in mobile AI through Samsung Electronics, which plans to double the number of Gemini-powered devices this year. Separately, reports indicate Meta Platforms is in talks to spend billions on Google’s AI chips beginning in 2027.
Alphabet’s resurgence has also been buoyed by steady advertising revenues, a favorable U.S. court ruling allowing it to retain control of Chrome and Android, and renewed investor optimism. “Of the Magnificent Seven, it’s the one name that has surprised us most over the past year,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management, citing innovation and earnings performance.
With Gemini now embedded at the core of Apple’s AI ambitions, Alphabet has firmly reasserted itself at the center of the generative AI shift.
