Apple-Google AI Pact Sidelines OpenAI, Cementing Gemini’s Ecosystem Lead

TradingKey - Monday, January 12 (ET), Apple announced it has entered into a Google multi-year partnership, where Google's Gemini models and cloud technology will provide support for future Apple Foundation Models, and will be used for the upgraded version of Siri to be launched later this year. The news pushed Google's market value past $4 trillion.

This partnership could allow Apple to "wipe away its past disgrace": the AI-enhanced version of Siri, originally scheduled for release at WWDC 2024, is finally expected to debut, as Apple, once lagging in AI R&D, begins to catch up with other giants. But for OpenAI, the market interpreted this as ChatGPT's exit.

Will this cooperation really deal a heavy blow to OpenAI? Can Google solidify its position in the AI ecosystem through this partnership?

Foundational Shift: Gemini as Apple’s New AI Bedrock

There are reports that users could experience the results of this collaboration between Apple and Google as early as iOS 26.4, namely the upgraded Siri powered by Gemini. The new Siri will have cross-app information integration capabilities, able to understand screen content, emails, and chat records.

Although Apple and Google compete in many fields, their cooperation is equally profound. It is reported that Google pays Apple tens of billions of dollars every year to make its search engine the default option on Apple products.

This announcement marks a deepening of their cooperation. In fact, as early as August last year, Bloomberg reported on the negotiations between Apple and Google, where Apple was considering using a customized Gemini model to provide AI functions for the next generation of Siri, and planned to pay about $1 billion annually for Google's AI technology. Currently, neither side has disclosed the financial terms and details of the cooperation.

According to the statement, Google's provision this time is not a simple application-layer access, but rather the direct use of Gemini and cloud technology to train Apple's foundation models, building the underlying cornerstone of Apple Intelligence, which is different from the way Apple cooperated with OpenAI.

Going back to WWDC 2024, Apple first introduced Apple Intelligence and high-profiled OpenAI as its partner, aiming to integrate ChatGPT into Siri and Apple Intelligence to handle more complex queries. The collaboration between Apple and OpenAI only involved application-level calls. According to reports from CNBC, Apple stated it would not modify its agreement with OpenAI, while OpenAI has not commented.

Apple Shifts Gears as OpenAI Evolves Into Potential Hardware Rival

Although OpenAI has the most "retail users" in the field of generative AI, the indisputable fact is that Gemini 3.0 shattered the long-standing myth surrounding ChatGPT upon its release. In more than a dozen benchmarks, Gemini 3.0 surpassed its competitors across various intelligence metrics. Currently, Gemini's monthly active users have exceeded 650 million, up from 450 million last summer.

At the model level, OpenAI no longer holds a dominant lead. Regarding infrastructure, OpenAI's computing power still relies on Microsoft Azure, but Google can use its self-developed TPU chips to train models; by comparison, the latter clearly has a cost advantage. The deep integration of Google's self-developed TPUs and models improves the inference energy efficiency and response speed of the Gemini model. Under these circumstances, Google's Gemini has become the better choice for Apple.

Furthermore, the relationship between Apple and OpenAI has also undergone subtle changes. Currently, OpenAI's hardware layout is gradually deepening. In May 2025, OpenAI acquired io Products, a hardware company founded by former Apple Chief Designer Jony Ive, and the former head of Apple hardware also joined OpenAI, which is seen as the publicization of OpenAI's threat to Apple .

For OpenAI, the "thinning" of the partnership with Apple not only means a major customer being taken away, but more dangerously, Apple will create a new threat .

Analysts at Wedbush Securities stated that Apple's two major goals for 2026 are to cooperate with Gemini and improve the AI-enhanced version of Siri, and they expect Apple will launch AI-driven subscription services this summer. Given Apple's huge user base, deeply integrated ecosystem, and extremely low user migration costs, this move by Apple could deal a heavy blow to ChatGPT subscriptions.

Google Bids for the AI Standard

For Google, the partnership with Apple is not only a profitable business, but also a re-establishment of its position in the AI ecosystem.

Through this cooperation, Google's Gemini will no longer only compete for subscribers with ChatGPT at the standalone application level, but will also unify the underlying AI logic of most smart devices across both Android and iOS systems, thereby creating a barrier at the development level, which is something OpenAI cannot do for the time being.

In addition, Google no longer needs to scramble for traffic entry points; the vast user base of the Apple ecosystem is the best source of traffic. As the underlying cornerstone of Apple Intelligence, Google will enjoy priority access to Apple's traffic.

In fact, Google's progress in the AI field had already been advancing by leaps and bounds prior to the announcement of this partnership. At the Google Developer Conference in May 2025, Google unveiled a series of advanced AI products. In August, Google launched the image generation tool, Nano Banana, and Gemini usage entered its fastest growth phase to date. The launch of Gemini 3.0 in November was a defining moment for Google; the company has established itself as a leader in the field of large models by virtue of its exceptional reasoning capabilities.

Through this alliance with Apple, can Google truly end OpenAI's era of hegemony? The market is watching with bated breath.