Apple pays Google $1 billion a year to customize Gemini for Siri

According to a November 2 report by Bloomberg's Mark Gurman, Apple is working with Google to develop a custom Gemini AI model to power the next version of its Siri virtual assistant, slated to launch in spring 2026.

A follow-up report on Wednesday said Apple will spend $1 billion a year on this new 1.2 trillion parameter model. Apple is reportedly considering using Google or AI competitor Anthropic for the next version of Siri.

A customized version of Gemini, worth up to $1 billion a year, will be used for Apple Siri.

However, Anthropic wants to "cut" Apple for $1.5 billion a year. Although it has a lot of money, an additional $500 million is not too much for Apple to consider for too long.

This custom Gemini model will run on Apple's own cloud servers. Apple's models will continue to run on devices that store personal data, while Gemini will operate on servers for more complex tasks.

According to Bloomberg, Apple has no plans to highlight Google's involvement in its marketing, which is why Anthropic is asking for the price.

As major tech companies shift toward AI, Apple has largely been left behind. The tech company has been slow to adopt AI and has yet to develop competitive AI models.

Instead, they turned to companies like OpenAI, the founder of ChatGPT, to add data-generating capabilities to Apple's existing systems.

Apple is falling behind and facing a crisis in AI.

However, the promise of a truly dedicated Apple Intelligence has yet to materialize, despite improvements. Apple CEO Tim Cook also hasn't ruled out the possibility of acquiring an AI company.

Apple also has a close relationship with Google. The search giant pays Apple $20 billion a year to remain the default search engine on Apple devices. This relationship is profitable for Apple and prevents it from building a competitor to Google Search, an allegation Apple denies.

The deal is a key element in the Justice Department 's lawsuit against Google, in which a judge ruled that the company was operating an illegal monopoly.

Despite lagging in AI, Apple is still doing well financially. Last month, the company's market capitalization surpassed $4 trillion.