New York, 13 Jan

Apple will lean on Google to help complete its long-delayed efforts to upgrade virtual assistant Siri and introduce a broader set of artificial intelligence tools to the iPhone, as the technology giant works to close the gap in the fast-moving AI race.

The agreement allowing Apple to access Google’s AI capabilities was announced on Monday through a joint statement by the Silicon Valley rivals. Under the partnership, Google’s Gemini technology will be used to tailor a range of AI-powered features under Apple’s “Apple Intelligence” branding across iPhones and other devices.

Apple’s struggles in artificial intelligence had earlier forced the Cupertino, California-based company to admit that a long-promised Siri upgrade would not be ready until sometime in 2026.

For Google, Apple’s endorsement of its AI tools is being seen as a major strategic win. The company has steadily expanded the use of its Gemini technology across products such as search and Gmail, intensifying competition with OpenAI, whose ChatGPT chatbot already has an integration deal with Apple that allows it to be offered as an option on the iPhone.

Wedbush Securities analyst Dan Ives described the partnership as a “major validation moment for Google” in a research note issued on Monday.

Google’s growing AI footprint has also boosted the valuation of its parent company, Alphabet Inc., which on Monday crossed a $4 trillion market capitalisation for the first time.

Alphabet’s valuation stood around $150 billion higher than Apple’s, which had long held the title of the world’s most valuable company before the rapid rise of AI reshaped investor priorities.

Three other companies have entered the $4 trillion valuation club over the past year, led by AI chipmaker Nvidia, which was the first to reach the milestone last July. Apple and Microsoft also briefly crossed the threshold last year, though both now sit below it.

Nvidia’s valuation briefly surged past $5 trillion in late October before retreating amid concerns that massive AI investments could be inflating a market bubble. Despite those worries, strong demand for its AI-focused chips has kept Nvidia at the top with a market value of about $4.5 trillion.

Alphabet’s stock has rallied sharply since early September after the company avoided a forced breakup following a US court ruling last year that labelled Google’s search engine an illegal monopoly.

The judge’s remedies were widely seen by investors as relatively mild, helping drive a 57 per cent rise in Alphabet’s share price and adding roughly $1.4 trillion in shareholder value.

While Google and rivals moved quickly in the AI race, Apple had promised a major push into the space with a series of features expected to arrive on iPhones in 2024 through a high-profile software update. Many of those features, however, remain under development, even as Google and Samsung continue rolling out AI tools on their own devices.

One of the most noticeable gaps on the iPhone has been the delayed overhaul of Siri, which Apple had said would become more conversational and capable of handling multiple tasks.

The court ruling also allowed Google and Apple to continue their long-standing search partnership, under which Google pays Apple more than $20 billion a year to remain the default search engine on Apple devices, subject to limited changes ordered by the judge.