Alphabet, Google's parent company, topped a $4 trillion market capitalization after Apple adopted Google's Gemini as the core model for its artificial intelligence (AI) system "Apple Intelligence." On news of the major deal between the two companies, the market reacted immediately, further cementing Google's position among the top global big tech firms by market cap.
Apple and Google said in a joint statement on the 12th (local time) that they signed a multi-year deal to build the next-generation Apple foundation model on Google's Gemini model and cloud technology. Under the agreement, Google's AI technology becomes a key element powering major features of Apple Intelligence, including a new version of Siri that Apple will unveil this year.
Apple said, "After careful evaluation, we determined that Google's AI technology provides the most suitable foundation for the Apple foundation model." However, the AI features will run on a structure that combines on-device processing with Apple's private cloud computing, meaning Apple's long-emphasized privacy principles remain intact.
The specific terms of the contract were not disclosed, but earlier reports indicated the two sides were discussing cooperation worth about $1 billion a year.
Immediately after the announcement, Alphabet shares rose, with its market capitalization briefly exceeding $4 trillion during intraday trading. Alphabet became the fourth company in history to surpass a $4 trillion market cap, following Nvidia, Microsoft, and Apple. The stock later eased, with market cap trading around $3.99 trillion.
Google was once judged to be lagging in the AI race after harsh reviews of the predecessor to Gemini, but it has recently regained market confidence as high-performance model launches, AI accelerator chips, and cloud business results aligned. In financial circles, there is also the view that Google is a corporations equipped with chips, infrastructure, and models amid rising AI demand.
Earlier this month, Google overtook Apple to rank No. 2 in market capitalization for the first time in eight years, and it is also strengthening its lead in the competitive landscape among big tech over AI.