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Apple (NASDAQ: AAPL) is exploring a deal with Google and OpenAI.
The iPhone maker is rumored to be seeking a partner to provide a large language model.
Apple is in negotiations with Alphabet (NASDAQ: GOOG) to license Gemini, according to Bloomberg.
Shares of Alphabet rose 4.5% on the news. Apple stock rose 0.6%.
Apple will release an iPhone later this year with AI models directly on the device.
Here’s why I think a deal with Google is unlikely…
1. Apple Is Investing Heavily in AI
Apple has acquired 22 AI startups since 2017. This includes the purchase of DarwinAI earlier this year.
Plus, Apple shut down its self-driving EV initiative last year. And said the 2,000 employees on that project would now focus on AI initiatives.
2. Gemini Credibility Issues
Google’s latest Gemini showed huge amounts of bias.
You’ve probably heard of it creating images that are factually incorrect – such as creating images of black Nazis or women founding fathers.
It seems surprising that Apple would want to integrate this AI model into its devices.
3. Apple Loses Credibility Outsourcing AI
Artificial Intelligence is the next big thing.
It seems absolutely shocking that Apple would elect to “outsource” this to Google. This would be similar to Microsoft “outsourcing” the Internet browsers to Netscape in the 1990s.
Here’s the thing…
Apple is rarely a first mover.
Instead, the company tends to find emerging product categories. And then create a far better product in order to take market share.
Apple seems behind on AI right now.
However, it appears that the next generation of iPhones will embrace AI. This could include what’s being dubbed Apple GPT.
Apple typically releases its new products in September. And that creates lots of excitement from investors BEFORE the products are released.
Ian