Beyond Google talks, Apple needs to 'catch up' on AI development
According to a report from Bloomberg, Apple (AAPL) is currently in talks with Google (GOOG, GOOGL) to use its generative AI engine, Google Gemini, in iPhones. Oppenheimer Senior Analyst of Emerging Technologies and Services Martin Yang joins Yahoo Finance to discuss the reported talks and Apple's position within the AI sector.
For the partnership to be successful for both companies, Yan states, "it will require a lot of nuance on how the large language models or gen AI functions will be implemented because it can augment search capabilities, but there are also a large number of applications it can use. One example would be simulating communication to copilot for the productivity applications from Apple, similar to Microsoft's (MSFT) implementation of copilot for its Office suite. "
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Editor's note: This article was written by Nicholas Jacobino
Video Transcript
SEANA SMITH: Apple is reportedly in talks with Google to use its generative AI engine Gemini on its iPhones. This is according to a report from Bloomberg. This comes after Apple also reportedly held conversations with OpenAI to use its product. For more on what this could mean for the tech giants and the broader industry, we want to bring in Martin Yang. He's Oppenheimer's senior analyst of emerging technologies and services. Martin, it's good to see you. So just first, your reaction to this report, and if it's true, how big of a deal this is for Apple?
MARTIN YANG: This is a very big deal for Apple because it removes the near-term concern that Apple cannot implement any GenAI functions on iPhone due to its lack of infrastructure investments relative to other large tech companies. And then, I think, it positions the iPhone, at least in the near-term, to be the go-to device to interact with large language models.
BRAD SMITH: And so additionally, Martin, when you think about the fact that Google Alphabet is going to pick up a potential win on this as well, I mean, what is it going to take for this to be successful as both of these companies would want it to be?
MARTIN YANG: I think it will require a lot of nuance on how the large language models or GenAI functions will be implemented because it can augment search capabilities, but there are also a large number of applications they can use. One example will be a similar implementation to Copilot for the productivity functions-- productivity applications from Apple similar to Microsoft implementation of Copilot for Office suite.
SEANA SMITH: Martin, what does it tell us, though, about Apple's internal efforts, because there has been some optimism, some chatter, especially over the last couple of weeks, just about what they are doing and how much they are investing in their own AI efforts? Is that maybe not as far as some had anticipated it was up until this point?
MARTIN YANG: Right. We believe that there's a ketchup Apple needs to do to build up its own infrastructure to train large language models because the short supply of GPU cards from NVIDIA. And in the-- maybe in the near-term, I think, there's a way for Apple to implement on-device AIs using Apple Silicon, but those are not the equivalent of OpenAI's GPT-4 or Gemini in the near-term.
BRAD SMITH: Martin, do you think about what generative AI could be for the next supercycle for iPhones and for Apple specifically? What type of material difference are you expecting as consumers try to get their hands on the latest cutting-edge technology there?
MARTIN YANG: Sure, I think there are a couple of ways for us to get excited about the next generation iPhone with more capable AI functions. Number one will be Siri becomes real, really helpful to the users. Right now, it's really handicapped, and by-- Siri right now is referring to, telling us about weather, telling us our time, setting timers.
And I think the next iteration of Siri augmented by AI could be becomes really helpful as an agent will help us navigate through multiple apps and then getting a real bookings for hotels, reservations, and restaurants, and then getting us really a real-world applications of things we could do with iPhones, you know, where the interface becomes voice and as opposed to touch and other controls.
