Apple will use Google to improve its Siri virtual assistant and introduce other artificial intelligence features to the iPhone as the incumbent company tries to catch up with the latest technology fads.
The deal, which allows Apple to use Google’s artificial intelligence technology, was revealed Monday in a joint statement by Silicon Valley powers. The partnership will build on Google’s Gemini technology to personalize a suite of artificial intelligence features called “Apple Intelligence” on iPhones and other products.
After Google and others took the lead in the artificial intelligence race, Apple has promised to make its first big bet in the field with a series of new features due to arrive on the iPhone in 2024 as part of an announced software update.
However, many of Apple’s AI features are still in development, while Google and Samsung are introducing more technology into their devices. One of the most obvious shortcomings of AI in the iPhone was the promised upgrade to Siri, which was supposed to turn the often confused assistant into a more conversational and versatile multitasker.
Google even subtly poked fun at the iPhone’s AI shortcomings in an ad promoting the release of its latest Pixel phone last summer.
Apple’s AI missteps led to the Cupertino, California-based company admitting last year that an update to Siri wouldn’t happen until 2026.
Forcing Apple to support its artificial intelligence represents a victory for Google, which has been steadily rolling out new features based on Gemini technology in its search engine and Gmail. The progress has increased Google’s competition with OpenAI and its chatbot ChatGPT, which already has a deal with Apple making it an option for the iPhone.
Dan Ives, an analyst at Wedbush Securities, hailed the Apple deal as a “significant validation moment for Google” in a research note on Monday.
Google’s advances in artificial intelligence have helped its parent company, Alphabet Inc., become slightly more valuable than Apple in investor valuations. Alphabet was a highlight on Monday when it topped $4 trillion in market value for the first time in morning trading before falling below that threshold later in the session.
Still, Alphabet’s market value remained about $150 billion higher than Apple, which for years was considered the world’s most valuable company before the rise of artificial intelligence changed the game.
Three other companies joined the $4 trillion club last year, with artificial intelligence chip maker Nvidia becoming the first last July. Apple and Microsoft also broke this barrier last year, although the market value of these two rivals is now below $4 trillion.
Nvidia’s market value briefly topped $5 trillion in late October before falling amid recurring concerns that the hundreds of billions of dollars being poured into artificial intelligence technology could create a bubble that will eventually burst. With its AI chipsets still in high demand, Nvidia remains on top with a market value of $4.5 trillion.
Alphabet’s share price has been rising since early September, when Google fended off a government attempt to break up its Internet empire following a ruling last year that labeled its ubiquitous search engine an illegal monopoly.
To prevent further abuse, the federal judge overseeing the case ordered a reorganization that investors saw as a relative slap in the face, and Alphabet’s stock has since risen 36%, giving shareholders an additional $1.5 trillion in wealth.
The ruling also left the door open to the long-standing search alliance between Google and Apple. Google pays Apple more than $20 billion annually to be the preferred search engine for iPhones and other Apple products, and that arrangement is still allowed with some modifications, according to a judge’s decision in the search case.
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