Apple just struck a massive $1 billion annual deal with Google to power its next-generation Siri with a custom version of the Gemini AI model. The partnership represents Apple's biggest AI investment yet and signals the iPhone maker's urgent push to catch up in the artificial intelligence race after months of delays.
Apple just rewrote the AI playbook with a bombshell $1 billion annual partnership that puts Google's Gemini at the heart of Siri's brain. The deal, first reported by Bloomberg's Mark Gurman, represents the largest AI licensing agreement in tech history and signals Apple's desperation to close the intelligence gap.
The numbers tell the story of Apple's AI awakening. Google's custom Gemini model will pack 1.2 trillion parameters - a massive leap from the 150 billion parameters powering Apple's current cloud-based Intelligence features. That's eight times the computational muscle, designed specifically for tasks like summarization and planning that have become table stakes in the AI era.
"We've been preparing for this shift since Q2," one Apple executive familiar with the negotiations told Bloomberg, though the source declined to be named. The admission reveals how frantically Apple's been working behind the scenes while competitors like Microsoft and Google raced ahead with ChatGPT integrations and Bard deployments.
Apple's approach splits the difference between dependence and independence. The company will run the custom Gemini model on its own Private Cloud Compute servers, maintaining the privacy-first architecture that's become central to its brand promise. Meanwhile, Apple's keeping some Siri functions powered by in-house models, creating a hybrid system that hedges against total reliance on Google's technology.
This represents a dramatic shift from Apple's traditional stance on AI partnerships. Just six months ago, Bloomberg reported that Apple had been weighing models from OpenAI and Anthropic before ultimately settling on Google's offering. The company already integrates ChatGPT into Siri for certain queries, but this Gemini deal goes much deeper into the operating system's core intelligence.
The business implications ripple far beyond Cupertino. Google's cloud division just landed its biggest enterprise customer, potentially adding $1 billion in recurring revenue at margins that could approach 70%. For Apple, it's an expensive insurance policy against falling further behind in the AI arms race that's reshaping how users interact with their devices.
