Deal Overview

Apple has agreed to a multi‑year arrangement with Google that will see the tech giant deliver a custom Gemini artificial‑intelligence model for Apple’s virtual assistant, Siri. Under the terms of the agreement, Apple will pay Google $1 billion per year for the model’s use.

Technical Details

The custom Gemini model is described as a 1.2 trillion‑parameter system that will operate on Apple’s private‑cloud computing infrastructure. Apple’s own AI models will continue to run locally on devices to keep personal data private, while the Gemini model will handle more complex queries that require server‑side processing. Apple does not plan to publicize Google’s involvement in its marketing.

Alternative Evaluation

Prior to finalizing the Google partnership, Apple considered using Anthropic’s technology for the next Siri iteration. Anthropic’s offering would have cost Apple $1.5 billion per year, making Google’s $1 billion proposal the more economical option.

Strategic Implications

The move reflects Apple’s broader emphasis on privacy and its preference for on‑device AI where feasible. By outsourcing the heavy‑lifting AI work to Google, Apple can leverage advanced generative capabilities without building a comparable model in‑house, which would demand substantial expertise and investment.

Financial Context

Apple’s agreement with Google complements an existing $20 billion annual payment Apple makes to Google to remain the default search engine on its devices. The partnership comes as Apple’s market valuation has surpassed $4 trillion, underscoring the company’s financial capacity to invest in strategic AI collaborations.

Industry Reactions

Both Google and Apple declined to comment on the specifics of the arrangement. The deal highlights the growing interdependence among major technology firms as they navigate the rapid evolution of generative AI.

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