Shaking Up the Game by Choosing Google's Gemini
Apple is adopting a "kingmaker" strategy to maximize its influence by selecting key partners such as Google and OpenAI, rather than engaging directly in the costly race to develop its own artificial intelligence (AI) models.
According to a report by the Financial Times (FT) on January 15 (local time), Apple has decided to introduce Google's AI chatbot "Gemini" to the iPhone and its AI assistant "Siri," instead of building large-scale proprietary AI models and infrastructure.
Apple, which has already integrated OpenAI's "ChatGPT" into its devices, is now partnering with Google as well. Analysts say that this move has allowed Apple to seize the so-called "leadership in the AI era," determining which AI models will become mainstream.
Previously, some Apple investors expressed concerns that the company might be falling behind in the AI competition. However, the iPhone 17, released in September last year, was considered a commercial success. Apple's stock price has risen by more than 12% over the past 12 months.
In terms of AI, Apple appears to have shifted its focus to smaller, more cost-effective AI models. Citing sources, FT reported that Google's narrowing performance gap with OpenAI influenced Apple's decision to choose Gemini. In addition, Apple needed a partner with proven experience in operating large-scale enterprise services.
FT analyzed, "Apple has positioned itself to decide whose model will become mainstream through the iPhone, without participating in the capital-intensive AI arms race," adding that the company is asserting its leadership in the AI era in a different way.
Previously, Apple CEO Tim Cook stated that the company would "significantly increase" its AI investments. In reality, however, Apple's capital expenditures have remained at about 3% of its revenue over the past five years. For fiscal year 2025, Apple's investment in tangible assets is projected at $12.7 billion, a stark contrast to the approximately $90 billion that Google is expected to invest during the same period. Microsoft, Amazon, and Meta have also poured hundreds of billions of dollars into AI data centers since the emergence of ChatGPT.
A former Apple executive told FT, "Apple is in a position where it must satisfy both Wall Street investors and consumer expectations," adding, "The recent partnership with Google is a secondary result of Apple's policy not to make overly large AI investments."
There are also some concerns. Investors worried about Apple's insufficient AI investment have pointed to delays in the overhaul of Siri and initial functional errors. While Apple is building a "private cloud computing" environment focused on small models that operate on-device and enhanced security, the company is seen as lagging behind in the competition for large-scale, general-purpose models. The departure of some key AI talent to competitors such as Meta is also a concern.
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