Google Gemini to drive AI features in iPhone? Apple Inc in talks with Alphabet: reports

If the Google Gemini-Apple iPhone deal goes through, it will be the biggest deal between Apple and Alphabet Inc. since a partnership that makes Google the default search engine on Apple’s Safari web browser. (Image credit: Bagus Hernawan via Unsplash)

We had earlier reported that the upcoming iPhone 16 and the new version of operating system iOS 18 are likely to see a strong AI (artificial intelligence) flavour. A new report by Bloomberg’s Mark Gurman suggests a blockbuster deal is in the making. It could mark the biggest deal between Apple and Alphabet Inc. (Google's parent company) since a partnership that makes Google the default search engine on Apple’s Safari web browser. Both Apple and Alphabet shares have jumped up following this report.

According to Gurman, the deal involves Apple licensing Gemini, Google’s set of generative AI models, to power some new features coming to the iPhone software this year. According to Gurman’s report, Apple has also recently held discussions with Open AI. A potential deal could give Google access to more than 2 billion active users.

Google’s AI solution is also present in Samsung Galaxy S24, which played up Google AI features like Chat Assist and Live Translate on launch earlier this year.

It’s a win-win for both companies to stave off the challenge from Microsoft-backed Open AI. Microsoft has overtaken Apple to become the world’s most valuable firm. One of the key reasons for this change is the investor perception that Apple has been slow with the roll-out of AI apps. As for Google, this move could help it retain search dominance that has been threatened by the rise of ChatGPT.

Earlier this year we saw Google’s AI solution becoming the talking point of Samsung’s Galaxy S24 flagship launch. Samsung has played up Google AI features like Chat Assist and Live Translate. In a separate post on X (formerly Twitter), Mark Gurman has shared that Apple’s set of in-house AI features — a huge part of iOS 18 — are called “Project Graymatter” internally. These are separate from the Gemini-powered Generative AI features under discussion. A potential agreement between Apple and Google around Google Gemini is likely to invite scrutiny from US regulators who have already sued Google for its agreement with Apple to maintain its monopoly in search.

This agreement could provide Apple with a key element that’s currently missing in its AI strategy and also shake up the world of AI.