By Adam Clark

Apple looks to have finally chosen its dance partner for the artificial-intelligence ball. Google is the lucky suitor, according to a Bloomberg report.

Apple is ready to pay Alphabet, Google's parent, roughly $1 billion a year for access to the search company's Gemini AI technology, to carry out a long-awaited update to digital assistant Siri early next year, Bloomberg reported, citing people familiar with the matter.

Google declined to comment. Apple didn't immediately respond to a request for comment early on Thursday.

While the details could change, the plan underlines a shift in power between the two companies. Google currently pays Apple an estimated $20 billion annually to have its search engine as the default on the iPhone and other devices. Under the reported deal, Apple would be paying up for access to AI.

While Apple shares were down 0.5% in early trading, they have been on a roll with a gain of 23% over the past three months. Alphabet shares were up 0.9% after gaining 2.4% on Wednesday.

In the short term, having an upgraded Siri without spending the tens of billions of dollars that other big technology companies are pouring into AI could be a relief for Apple.

"While it has been apparent that Apple had a late start in relation to AI...and is playing catch up with other large technology companies, we believe the outlined opportunity will be a great solution, even on a medium-term basis," wrote J.P. Morgan analyst Samik Chatterjee in a research note.

But in the longer term, it seems unlikely that Apple -- a company famed for its insistence on controlling its ecosystem of hardware and software -- will be content to rely on a company that is also a rival. Can Apple be confident that it will receive the same quality AI and frequency of updates as users of Google's Android operating system?

That is why Apple is still keen on eventually replacing Gemini with an in-house solution, according to Bloomberg. It isn't clear how Apple would catch up with rivals who are spending more and even hiring away its own AI researchers.

Write to Adam Clark at adam.clark@barrons.com

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November 06, 2025 09:37 ET (14:37 GMT)

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