Apple and Alphabet Collaborate on AI
Apple Inc. (NASDAQ: AAPL) announced a multi-year collaboration with Alphabet Inc. (NASDAQ: GOOG, GOOGL) on January 12, 2023, integrating Alphabet’s Gemini AI models into an updated version of Siri. The partnership aims to enhance Apple’s AI capabilities, with Gemini serving as a foundational engine for future features.
This collaboration gives Apple access to advanced AI technology while maintaining its commitment to privacy through its Private Cloud Compute infrastructure. Alphabet benefits from exposure to Apple’s extensive user base of over 2.2 billion active devices, broadening the reach of its AI technology beyond its own apps.
While this partnership offers significant advantages for both companies, it also raises concerns about Apple’s dependency on an external AI provider, potentially impacting product differentiation. Alphabet will face increased capital expenditures, expected to range between $91 billion and $93 billion in 2025, to support its AI initiatives.
