Apple’s Siri Set to Run on Google Gemini, Propelling Alphabet to AI Forefront
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A landmark collaboration between Apple and Alphabet signals a major shift in the artificial intelligence landscape, potentially positioning Google Gemini as a dominant force in the AI chatbot market. Just years after being considered an AI laggard, Alphabet (GOOG +2.04%) (GOOGL +1.43%) is poised to capitalize on Apple’s struggles to develop competitive AI models, with the agreement potentially worth billions of dollars.
From AI Laggard to Potential Leader
The announcement that Google Gemini will underpin the next iteration of Siri marks a dramatic turnaround for Alphabet. A few years ago, the company was widely perceived as trailing OpenAI and its popular ChatGPT bot. “Alphabet was caught flatfooted when ChatGPT was released,” one analyst noted, and Apple appeared to be even further behind. Siri, already facing criticism for years, was rendered almost obsolete by the arrival of ChatGPT.
Apple attempted to address this with its own “Apple Intelligence” features, but those plans were ultimately delayed, disappointing both users and investors. The company had been relying on OpenAI’s ChatGPT to handle queries Siri couldn’t manage, but reports suggest OpenAI was hesitant to remain Apple’s primary AI partner as it focuses on its own device ambitions.
A Billion-Dollar Boost for Alphabet
The new partnership offers a significant financial opportunity for Alphabet. While specific financial details remain undisclosed, reports indicate the collaboration could be valued in the billions of dollars. The agreement is structured as a cloud computing deal, with the potential to significantly boost Alphabet’s cloud revenue, which already saw an impressive 34% increase in the third quarter, exceeding $15 billion.
Gemini’s Growing Reach
Google Gemini is already demonstrating substantial growth, boasting over 650 million monthly users – a significant increase from 450 million just six months ago. The AI model also powers Google Search, processing an estimated 2 billion monthly queries through its AI Mode. Currently available on hundreds of Android phone models, Gemini’s reach is set to expand with the launch of new devices. With Android’s global installed base numbering in the billions, the potential for user adoption is immense.
The addition of Apple’s iOS user base – exceeding 1 billion devices worldwide – further amplifies Gemini’s potential. This widespread availability across both Android and iOS platforms could challenge ChatGPT’s current dominance, which currently has approximately 900 million weekly active users. If mobile users on both platforms adopt Gemini as their default AI model, the need for alternative chatbots may diminish.
What Investors Should Watch
This Apple-Alphabet collaboration is still in its early stages, and its full impact remains to be seen. For Alphabet investors, key indicators to monitor include growth in Gemini subscriptions and, crucially, cloud computing revenue. The companies have confirmed that Apple’s foundation AI models will be built on Gemini and leverage Google’s cloud technology.
What is clear now is that Gemini is rapidly establishing itself as a leader in the AI space. After a period where artificial intelligence appeared to pose a threat to Alphabet, it now appears to be one of the company’s core strengths.
