Apple to Pay Google $1B Annually for Siri’s Gemini AI
▼ Summary
– Apple will pay Google $1 billion annually for a custom Gemini AI model to power Siri starting in spring 2026.
– The 1.2 trillion parameter Gemini model will run on Apple’s private cloud servers for complex tasks, while Apple’s own models handle on-device personal data.
– Apple chose Google over Anthropic, which would have cost $1.5 billion per year, and will not highlight Google’s role in marketing.
– Apple has lagged in AI development, relying on partners like OpenAI instead of creating competitive models internally.
– Apple and Google have an existing financial relationship, with Google paying $20 billion yearly to be the default search engine on Apple devices.
A major shift is underway in the artificial intelligence sector, with Apple reportedly agreeing to pay Google a staggering $1 billion annually to license a custom version of the Gemini AI model. This powerful new system, said to contain 1.2 trillion parameters, is intended to become the engine for a significantly upgraded Siri virtual assistant expected to launch in the spring of 2026. This strategic partnership, detailed in recent reports, signals Apple’s urgent move to catch up in the highly competitive AI race.
According to the initial analysis, Apple’s decision came after evaluating proposals from both Google and its rival, Anthropic. The financial aspect played a crucial role in the final choice. While the deal with Google carries a substantial yearly price tag, partnering with Anthropic was projected to be even more expensive, costing an estimated $1.5 billion per year. This cost-benefit analysis ultimately tipped the scales in Google’s favor.
The technical implementation of this partnership is designed with a clear separation of duties. The custom Gemini model will operate exclusively on Apple’s own private cloud servers, handling more complex computational tasks that require significant processing power. For functions that involve sensitive personal information, Apple’s proprietary, on-device AI models will continue to run directly on iPhones and other hardware. This hybrid approach aims to balance powerful cloud-based intelligence with user privacy. Notably, it is reported that Apple does not plan to prominently feature Google’s involvement in its consumer marketing for the new Siri.
This move underscores a broader trend for Apple, which has been perceived as lagging behind competitors in the development of groundbreaking AI. While other tech giants have aggressively released their own models, Apple has taken a different path, opting to integrate third-party technology from firms like OpenAI to add generative AI features to its existing ecosystem. The long-promised vision of a fully autonomous “Apple Intelligence” has yet to be fully realized, though incremental improvements have been made. Company CEO Tim Cook has previously indicated that acquiring an established AI firm remains a possibility.
The billion-dollar AI agreement further deepens the already extensive financial relationship between Apple and Google. The search giant already pays Apple an estimated $20 billion each year to maintain its position as the default search engine on Safari across iPhones, iPads, and Macs. This highly lucrative arrangement has been a central point in a major antitrust lawsuit brought by the U.S. Department of Justice, which argued the deal illegally stifles competition, a claim Apple has consistently denied.
Despite its slower pace in artificial intelligence innovation, Apple’s financial health remains exceptionally strong. The company recently reaffirmed its market dominance by surpassing a $4 trillion market capitalization, demonstrating that its current business model continues to generate immense value for shareholders even as it strategically pivots to embrace the next technological frontier.
(Source: ZDNET)
