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Apple’s Gemini licensing stirs debate over its AI strategy and control
The company reportedly pays Alphabet around $1 billion a year for Gemini to power a revamped Siri, while investors also focus on how Apple plans to monetize new AI features.
Apple is reportedly paying Alphabet about $1 billion per year for its Gemini model, a deal that is being used as evidence in a growing debate over whether Apple is taking a cautious approach to artificial intelligence. The arrangement supports a revamped Siri, according to MarketBeat Ratings.
Skeptics argue that Apple is effectively renting core AI technology from a rival instead of building its own model, raising questions about how much control and differentiation it can maintain given its reputation for tightly integrated products. They also point to the risk that, if the same company powers AI across multiple platforms, investors may question what premium iPhone pricing is buying.
The article also notes that Apple has said little about how it will make money from its new AI features, framing them mainly as reasons to upgrade to newer iPhones. In the context of consumers increasingly paying for standalone AI services elsewhere, that lack of clarity is presented as a gap.
Still, the bull case described in the piece is that Apple may not need to create the winning AI model itself, but rather needs to remain the access point for a large global user base. The market reaction mentioned includes Apple shares down about 10% since last month’s earnings report, reflecting uncertainty over how to interpret the strategy.