Apple Strikes $1 Billion Deal with Google to Power Next-Generation Siri with Custom Gemini AI Model

Reviewed byNidhi Govil

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Apple will reportedly pay Google $1 billion annually for a custom 1.2 trillion parameter Gemini AI model to power Siri's major overhaul, expected to launch in spring 2026. The partnership addresses Apple's AI development challenges while maintaining privacy through Apple's own servers.

Apple's Billion-Dollar AI Partnership

Apple is reportedly finalizing a landmark deal with Google that will see the iPhone maker pay approximately $1 billion annually for a custom version of Google's Gemini AI model to power the next generation of Siri

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. The partnership, expected to debut with iOS 26.4 in spring 2026, represents a significant shift in Apple's approach to artificial intelligence development and marks one of the largest AI licensing deals in the industry.

Source: Geeky Gadgets

Source: Geeky Gadgets

The custom Gemini model will feature 1.2 trillion parameters, significantly dwarfing Apple's current AI capabilities

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. Apple reportedly evaluated multiple AI providers, including Anthropic, before settling on Google's offering. The decision was partly financial – while Google's solution costs $1 billion annually, Anthropic's alternative would have required $1.5 billion per year

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Source: Macworld

Source: Macworld

Keeping the Partnership Under Wraps

Despite the substantial collaboration, Apple has no plans to publicly acknowledge Google's role in powering Siri's enhanced capabilities

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. Internally, the company refers to the Gemini-based system as "AFM v10," short for "Apple Foundation Model version 10," a deliberate naming choice designed to obscure the partnership and avoid confusing staff and customers.

This secretive approach aligns with Apple's preference to present AI capabilities as part of its own ecosystem, even when relying heavily on external technology. The company aims to maintain its brand image of technological self-sufficiency while addressing urgent competitive pressures in the AI space

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Privacy and Infrastructure Considerations

To address privacy concerns, Apple will run the Gemini-based system on its own Private Cloud Compute servers, ensuring user data remains separate from Google's systems

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. Apple's own AI models will continue handling personal data processing on individual devices, while the more powerful Gemini model will manage complex server-side tasks.

This hybrid approach represents Apple's attempt to balance computational power with its privacy-first philosophy. The arrangement allows Apple to deliver advanced AI capabilities without compromising its commitment to user data protection, a key differentiator in the competitive smartphone market

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Source: ET

Source: ET

Strategic Implications and Industry Response

The partnership highlights Apple's acknowledgment that it has fallen behind in AI development despite being one of the world's most valuable companies

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. Industry observers view the deal as both pragmatic and concerning – while it addresses immediate competitive needs, it also signals Apple's dependence on external AI technology for core features.

The arrangement builds upon Apple and Google's existing relationship, where Google already pays Apple approximately $20 billion annually to remain the default search engine on Apple devices

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. This financial interdependence between the two tech giants continues despite their competition in various market segments.

Apple CEO Tim Cook has maintained that the company prefers to be "not first, but best" in technology adoption, but the delayed rollout of promised AI features has created pressure to accelerate development timelines

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