Apple in talks with Google to use generative AI in iPhones- Bloomberg
Investing.com-- Apple Inc (NASDAQ: AAPL) is in talks with Alphabet Inc's (NASDAQ: GOOGL) Google to use the latter's Gemini generative artificial intelligence to incorporate AI features into its flagship iPhones, Bloomberg reported on Monday.
The two parties are in active negotiations to let Apple license Gemini in some upcoming features for the iPhone's software, Bloomberg reported, citing people familiar with the matter.
Apple had also held discussions with Microsoft Corporation (NASDAQ: MSFT) backed OpenAI and was potentially considering using its ChatGPT model as well.
The negotiations between Apple Inc and Google were still in early stages, and that the two had not decided on any agreement or branding.
Apple currently has a deal with Google under which the latter's search engine is the default search engine for Apple's Safari web browser.
The Bloomberg report comes just weeks after Google's Gemini bot attracted criticism for generating controversial images with its image generation tool. Google had then suspended the bot's image generation feature.
The iPhone maker has somewhat lagged its peers in rolling out AI features for its flagship offerings- features that rivals Samsung Electronics Co Ltd (KS:005930) and Google have already incorporated in recent months.
Still, Apple CEO Tim Cook has signaled that the company is planning to disclose more about its generative AI ambitions later in the year. Recent reports also showed that Apple had scrapped its development of an electric vehicle to instead divert resources towards AI development.
Generative AI shot into the public spotlight with the release of OpenAI's ChatGPT in late-2022. The program, which garnered millions of subscribers on its ability to generate convincing, human-like responses to text prompts, saw major tech companies rush to develop their own offerings.
Reacting to the report, analysts at Lynx Equity Strategies said that if Apple forms an alliance with Google Gemini for AI workloads on the cloud, the iPhone maker achieves two crucial wins: "1) no need to increase capex for funding expensive GPU-based AI servers and 2) access to Google’s lower cost air-cooled TPU chip for running AI workloads."
"Our checks show Google’s TPU, unlike NVDA’s GPU, does NOT need water-cooling. This implies the TPU consumes less power than the H100. Consequently, Google’s TPU may have a lower cost of operations vs. NVDA GPU solution," added the firm. "[The] cost of AI inferencing to AAPL would therefore be lower than were it to use a GPU solution." Overall, they think Apple's use of Google Gemini is a positive for AAPL and a negative for NVDA.
Meanwhile, Wedbush analysts said the move is part of a broader aggressive iPhone AI strategy.
"This strategic partnership is a missing piece in the Apple AI strategy and combines forces with Google for Gemini to power some of the AI features Apple is bringing to market," said the firm. "This is a major win for Google to get onto the Apple ecosystem and have access to the golden installed base of Cupertino with clearly a major license fee attached to this."