alphabet (google 2.46%) (google 2.43%) Just a few years ago, it seemed to be lagging behind in artificial intelligence (AI) when compared to newer rivals OpenAI and the popular ChatGPT bot. But alas, times have changed. alphabet and apple (AAPL 3.68%) recently announced that Google Gemini When it comes to the AI ​​model underlying the next version of Siri, Alphabet could be closing in on its AI chatbot dominance.

Specific financial details have not been released, but some reports say the partnership could be worth billions of dollars to Alphabet. Moreover, it could catapult Alphabet to the top of the artificial intelligence pack.

Image source: Getty Images.

Apple’s problem is Alphabet’s profit.

To understand how important all of this is, you first have to understand how far behind Apple has fallen behind its peers these days. I’ve said before that Alphabet suffered badly when ChatGPT was released, and if that’s true, then Apple was seriously taking a nap.

Siri has been a clear disappointment for years; Chat GPT We’ve released a feature that makes Siri look like an antique. This finally brought Apple out of its slumber, but the problem is that its AI models clearly haven’t proven to be good enough. The company touted its own Apple Intelligence feature for the iPhone, but then delayed it, much to the dismay of users and investors.

Apple’s approach to AI so far has been to partner with: OpenAI Offloads the user’s query to ChatGPT when Siri cannot process the user’s query. However, according to some reports, OpenAI did not want to remain Apple’s primary AI collaborator as it pursues its own devices.

As a result, iPhone users will get a “more personalized” Siri later this year, using Google Gemini as the underlying AI model.

Today’s changes

(-3.68%) $-9.41

current price

$246.12

Key data points

Market capitalization

$3.8 trillion

daily range

$243.43 -$254.79

52 week range

$169.21 -$288.62

volume

2.7M

average volume

46M

gross profit

46.91%

dividend yield

0.40%

Why new partnership could help Alphabet become an AI leader

Google Gemini has already accomplished a lot artificial intelligence ground. The chatbot now has more than 650 million monthly users, up from 450 million about six months ago. The company’s AI models also power Google Search, and Alphabet says 2 billion queries are made through AI mode each month.

Gemini is already available on hundreds of Android smartphone models, and will be available on many more as new models launch over the next few years. With Android installed on billions of devices worldwide, there is plenty of opportunity for more people to start using Gemini as their primary AI agent.

But Apple also has a large iOS user base, with more than 1 billion devices worldwide. Gemini combination will soon become Android’s foundational AI model and iOS devices greatly increase the company’s chances of eroding ChatGPT’s current dominance.

OpenAI chatbots have about 900 million people weekly Being an active user, there is certainly a lot of room to make up. But if mobile users from both tech giants have Gemini as the default AI model on their devices, there may be little need to use a separate AI chatbot.

Today’s changes

(-2.46%) $-8.14

current price

$322.20

Key data points

Market capitalization

$4.0 trillion

daily range

$320.89 -$328.10

52 week range

$142.66 -$341.20

volume

1M

average volume

23M

gross profit

59.18%

dividend yield

0.25%

What Alphabet investors should pay attention to

This new collaboration between Apple and Alphabet is still new, so it will be interesting to see how it plays out for both companies. Especially in the case of Alphabet, investors are wondering how this could boost Gemini subscriptions and cloud computing Revenue.

According to a joint announcement by the two companies, Apple’s underlying AI model will be based on Gemini and use Google’s cloud technology. financial times newspaper reports that the partnership between the two companies is structured as a cloud computing deal, with Alphabet potentially receiving billions of dollars over several years. This could boost Alphabet’s cloud revenue, which had already grown an impressive 34% in the third quarter to more than $15 billion.

But what is clear now is that Gemini is quickly becoming the leader in AI. Artificial intelligence seemed like a threat to Alphabet for several years, but it’s now one of the company’s core strengths.