Monday, March 18, 2024

Will Apple Pay Google for Gemini, or Will Google Pay Apple?

User avatar of Henrik Andersen

Henrik Andersen

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Will Apple Pay Google for Gemini, or Will Google Pay Apple?

Apple is reportedly in talks with Google to negotiate a deal that would allow Apple to use Google's AI model, Gemini, for various iPhone features. This collaboration aims to enable the generation of texts and images through AI on Apple's smartphones. According to Bloomberg, based on conversations with insiders, the negotiations are ongoing so that Gemini can be utilized for new iPhone features later this year. The features in question would leverage generative AI, a type of AI that assists in creating text, computer code, images, and audio. Google's Gemini model is already being used for these purposes, including in a standalone Android app and for various AI functions in services like Google Docs, Slides, and Gmail.

In negotiations with Microsoft

Apple is also reportedly in discussions with other AI companies, including OpenAI, the entity behind ChatGPT, and Microsoft’s AI initiatives like chatbot Copilot, which are powered by OpenAI's AI models. Therefore, Bloomberg suggests that Apple might either partner with a company other than Google or possibly strike deals with multiple companies.

Apple's own AI

In addition to these negotiations, Apple is said to be developing its own artificial intelligence. Previous reports from Bloomberg indicated that this AI is expected to be released with the iOS 18 update later this year, featuring an enhanced version of the Siri voice assistant that is more intelligent through AI. This AI would also be integrated into various other iPhone applications, such as Apple Music, Keynote, and Pages, offering features that utilize Apple's proprietary AI models.

The AI functionalities developed by Apple could be used offline, in contrast to those from other companies, which require an internet connection, according to sources cited by Bloomberg. The tech giant plans to reveal its AI initiatives at the WWDC developers conference in June.

Google and Apple already collaborate in other areas, notably where Google pays the iPhone manufacturer to be the default search engine in the Safari browser. This deal reportedly brings Apple 36% of the revenue Google earns from searches made through the browser, primarily from advertisements, amounting to tens of billions of dollars.

Will Apple pay Google?

Given the ongoing negotiations and collaborations between Apple and Google, as well as Apple's discussions with other AI companies, the financial dynamics of a deal for Gemini's utilization remain speculative. Traditionally, Google has paid Apple significant sums for search engine placement within Safari, indicating a financial flow from Google to Apple. However, if Apple decides to incorporate Google's Gemini AI into its iPhone functionalities, it could lead to a new type of financial agreement. Whether Apple would pay Google for access to Gemini, or if Google would seek compensation in another form, remains to be seen. The outcome will likely depend on the strategic value both companies perceive in the partnership, potentially reshaping their existing financial arrangements.

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