- Alphabet and Apple struck a new multi-year deal to use Google’s Gemini AI to power Apple’s next-generation AI models.
- Google’s models will underpin Apple’s upcoming “Apple Intelligence” features, including the revamped Siri, due to launch this year, with analysts expecting an introduction in March or April.
- “After careful evaluation, Apple determined that Google’s Ai technology provides the most capable foundation for Apple Foundation Models,” and “Apple Intelligence will continue to run on Apple devices and Private Cloud Compute, while maintaining Apple’s industry-leading privacy standards.”
- Shares in Alphabet rose on the news and the company’s market capitalization briefly reached $4 trillion before settling near $3.98 trillion.
- Analysts reacted positively: Wedbush’s Daniel Ives called the move a validation for Google and an incremental positive for both firms, assigning a $350 12-month target to Apple; BofA’s Wamsi Mohan reiterated a buy rating with a $325 target.
Alphabet and Apple have agreed to a multi-year deal for Google’s Gemini Artificial Intelligence to power Apple’s next-generation AI models and features, including a revamped Siri set to debut this year. The companies said the arrangement will support Apple’s “Apple Intelligence” initiative while maintaining on-device operation and private cloud compute for user privacy.
In a statement, Google noted that “After careful evaluation, Apple determined that Google’s AI technology provides the most capable foundation for Apple Foundation Models.” The statement also said “Apple Intelligence will continue to run on Apple devices and Private Cloud Compute, while maintaining Apple’s industry-leading privacy standards.”
Market reaction was positive: shares of Alphabet rose after the announcement and its market capitalization briefly reached $4 trillion before dipping to about $3.98 trillion. With that milestone, Alphabet joins Apple, Microsoft, and NVIDIA as companies that have topped the $4 trillion mark.
Analysts gave bullish notes after the deal. Wedbush Securities analyst Daniel Ives said, “This is what the Street has been waiting for,” calling the agreement a validation for Google and an incremental positive for both stocks; he rated Apple outperform with a $350 12-month target. BofA Securities analyst Wamsi Mohan reiterated a buy rating on Apple with a $325 price target.
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