Google and Apple's rumored partnership could upend the AI industry

A composite image of Tim Cook and Sundar Pichai.
Apple and Google agreed on a deal where Google pays a whopping 36% of search revenue from Safari.Justin Sullivan / Nathan Howard/ Getty

Good morning! A controversial new study suggests intermittent fasting increases your chance of dying of cardiovascular illness. But critics of the research, which hasn't been published in a peer-reviewed journal, are skeptical of the findings.

In today's big story, we're looking at what a potential partnership between Google and Apple over AI features would mean for both companies and the wider industry.

What's on deck:

But first, a tech dream team.

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The big story

Google, Apple, AI

An Apple logo with two Google logos inside it.
Rebecca Zisser/BI

Two of the world's biggest tech companies are reportedly discussing a partnership that would upend the AI industry.

Apple is considering integrating Google's AI model, Gemini, into the iPhone.

Nothing is finalized, so the potential deal terms aren't clear. But the broad strokes of the arrangement could see Apple license Gemini to power new features on iPhone software as soon as this year, according to a report from Bloomberg's Mark Gurman.

The rumors come at the perfect time for both sides.

For weeks, Google has been publicly trashed over Gemini being too "woke." The criticism was so loud CEO Sundar Pichai acknowledged the company "got it wrong" in a memo. More broadly, insiders have questioned if Google can still be considered the tech world's vanguard of "cool."

Meanwhile, Apple has drawn attention for what it's not doing in AI. The company has been noticeably quiet around its AI plans compared to peers like Google, Microsoft, Meta, and Amazon.

CEO Tim Cook alluded to a bigger announcement about the tech later this year at Apple's annual shareholder meeting. But the company seems to be playing catch up, as it reallocated resources from its scrapped electric vehicle to focus on generative AI.

By teaming up, Google's Gemini gets a much-needed vote of confidence and access to the iPhone's sizable user base. And Apple keeps pace in the AI race by outsourcing some of the messy bits of the business, Business Insider's Hasan Chowdhury writes.

Wall Street seems to agree. Both companies' shares rallied off the back of the report, BI's Phil Rosen writes.

Sam Altman (left); Sundar Pichai (center); Elon Musk (right).
Mike Coppola/Getty Images for TIME ;Jerod Harris/Getty Images for Vox Media; Grzegorz Wajda/SOPA Images/LightRocket via Getty Images; Chelsea Jia Feng/BI

Apple and Google have a history of successful partnerships.

Google has paid Apple to be the default search provider on the iPhone for years. Apple gets a nice chunk of change — reportedly $18 billion in 2021. Google maintains its place as the go-to search engine on the internet. It's a win-win.

The tie-up isn't without its critics, though. It's a key piece of the Department of Justice's lawsuit against Google for "anticompetitive and exclusionary" behavior in a landmark trial for Big Tech that kicked off last year.

So even if Apple and Google come to an agreement, they could still face some serious regulatory pushback.(And to be clear, Bloomberg's report mentioned Apple had discussions with OpenAI, the creator of ChatGPT, about a similar arrangement, so there's still a long way to go.)

But if the history of Apple-Google deals has taught us anything, their combined power is almost unmatched.

3 things in markets

Photo illustration of Stephanie Cohen.
Stephanie Cohen, Goldman Sach's global head of platform solutions, is joining the cloud company Cloudflare.Goldman Sachs; Jenny Chang-Rodriguez/BI
  1. A Goldman goodbye from one of the top women on Wall Street. Stephanie Cohen is departing the bank to join Cloudflare as its first-ever chief strategy officer. She reflected on her 20-plus year career at Goldman, her advice to the bank's executives, and why she's jumping headfirst into tech.

  2. Wall Street is feeling optimistic about a soft landing. It's "risk-on" for many investors, who are betting the economy will be fine. The Street is mostly bullish thanks to strong economic growth and the prospect of interest rate cuts being in the pipeline.

  3. Japan's central bank raised interest rates for the first time in 17 years. The last time the Bank of Japan hiked borrowing costs was in February 2007. The market's response to its move was muted, with Tokyo's benchmark Nikkei 225 index closing 0.7% higher on Tuesday.

3 things in tech

Meta CEO Mark Zuckerberg (left); TikTok CEO Shou Chew (right).
Josh Edelson/AFP/Getty Images; Chip Somodevilla/Getty Images
  1. Instagram is beating TikTok. Instagram far outpaced TikTok in global downloads last year, using its core photo feature and reels to win over consumers. Still, people are spending more time on TikTok than on Instagram.

  2. Here's what creators were talking about at SXSW. While AI was a popular topic of discussion, many panels failed to talk about its downsides. Meanwhile, some creators and employees said they were "bored" of talking about a potential TikTok ban.

  3. Nvidia unveiled its next-generation chip. CEO Jensen Huang revealed the Blackwell B200 GPU at the semiconductor giant's "Woodstock of AI" event on Monday. The chips "are the engine to power this new industrial revolution," he said.

3 things in business

Two people sitting in inflatable tubes, floating in a pool.
Getty Images; Alyssa Powell/BI
  1. Recessions have a weird benefit: They help us live longer. New research found the worse the economy is, the longer we live. That's because it cuts down on pollution — with less activity (fewer people driving to work, factories and offices slowing down), the air gets cleaner.

  2. 5-Hour Energy's billionaire owner elbowed his way into publishing Sports Illustrated — now he's lost it. Late last year, Manoj Bhargava took control of Sports Illustrated publisher Arena Group, swiftly laying off dozens of employees. His erratic behavior and failure to pay a licensing fee, however, resulted in him losing SI.

  3. Reddit's CEO defended his massive pay package. Steve Huffman said in a video Q&A that his $193 million compensation package was based on both salary and stock. Some Quora, Reddit, and X users feel the amount is too high for a platform that doesn't pay its moderators and hasn't been profitable thus far.

In other news

What's happening today

  • US presidential primary elections will be held in Arizona, Florida, Illinois, Kansas, and Ohio.

  • NCAA March Madness kicks off today.

The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, editor, in London. Jordan Parker Erb, editor, in New York. George Glover, reporter, in London.

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