Apple’s struggles with AI are well known. Apple has lost key members of its AI team. And the failure of Apple Intelligence means Apple has struggled to keep pace with AI leaders. OpenAI, Perplexity and Google have left Apple in their wake. But Apple’s lack of progress (or abundant patience if you’re a true Apple believer) might be paying off. Those leaders have spent tens or hundreds of billions of dollars to develop their AI models. But Apple is about to ink a deal with Google that costs a fraction of that.
Apple has not lacked the software smarts to build its son AI tools. Apple lacked data. Most AI experts say that given the choice between more data scientists and more data, they’ll take more data every time.
Apple’s strong focus on privacy has meant it has not spent years scraping data from its users. Google, for example, has two decades of browsing and search data it can leverage. Other AI leaders have been scraping and buying data from all sorts of places. In some cases, that has led to legal issues as copyright and content owners have fought back against what they allege is data theft.
Apple’s deal with Google Gemini
A recent report by Bloomberg [Paywalled] says Apple is about to sign an agreement that will allow it run Google’s Gemini models on Apple servers. The cost to Apple of the deal is said to be USD$1B per year. This is a relatively small price to pay given Apple receives USD$20B to make Google the default search engine on Safari.
The result is that the Siri upgrade that will come with iOS 26.4, around mid 2026, will almost instantly catch up to the competition. And it will get this without compromising its own commitment to protecting the data of its users. This makes functional, financial and ethical sense for Apple.
The other benefit for Apple is that it doesn’t have to try and outspend its competitors. While $1B per year is a lot of money for most of us, it’s not a lot for Apple. In its latest earning report, Apple reported almost USD$210B in revenue from the iPhone – and that’s about half of what the company pulls in across all products and services. That $1B per years is just 0.24% of total annual revenue.
Siri gets a boost, the cost is relatively minor and Apple doesn’t have to find data to train new models. It’s a win-win-win scenario.
Anthony is the founder of Australian Apple News. He is a long-time Apple user and former editor of Australian Macworld. He has contributed to many technology magazines and newspapers as well as appearing regularly on radio and occasionally on TV.