Tech giant Apple (AAPL) is in the early stages of talks with another tech titan, Alphabet (GOOGL), to potentially use Google’s Gemini AI model to power an updated version of Siri, according to Bloomberg. The idea is to build a customized model that replaces or supplements Apple’s own internal models but can run on Apple’s servers. This comes as Apple tries to catch up in the generative AI race after falling behind its rivals. In addition to Google, Apple has explored partnerships with Anthropic and OpenAI in order to find the best possible technology to improve Siri’s performance and capabilities.
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Indeed, Apple hasn’t made a final decision yet and is still weighing its options. As a matter of fact, two versions of the new Siri are being developed. One is called “Linwood” and uses Apple’s own models, while the other is named “Glenwood” and is based on third-party models. Apple previously considered Anthropic as the leading candidate, but its high costs led it to expand its search. Interestingly, the idea of using external AI models is a shift from Apple’s usual focus on privacy and in-house control. Nevertheless, any outside models used for Siri would still run on Apple’s Private Cloud Compute servers, not directly on user devices, which would help Apple maintain some privacy safeguards.
However, it is worth noting that Apple’s internal AI teams have been disrupted, as key engineers left for rivals like Meta (META) due to lucrative compensation packages or concerns about the company’s direction. While Apple is now testing a more powerful trillion-parameter model for research, it remains behind leaders like OpenAI, which already use multi-trillion-parameter models. Even so, CEO Tim Cook recently told employees that Apple is investing heavily in AI and believes it can eventually deliver a superior product, even if it wasn’t first to market.
Is Apple a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 16 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $239.60 per share implies 5% upside potential.
