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Apple’s AI strategy will open doors for rivals rather than close them.
Apple on Monday at its Worldwide Developers Conference confirmed its widely-anticipated partnership with OpenAI to bring ChatGPT to its next generation of devices later this year. The AI chatbot will be available for free on the latest iPhone operating system (iOS 18), iPadOS 18, and macOS Sequoia. Analysts speculated that such a deal would spell trouble for Google — especially since it’s competing with both companies on two fronts: its Android devices compete with the iPhone, and its chatbot Gemini rivals ChatGPT.
“From an Alphabet investor perspective, there have been concerns, which we have shared, that any deal between Apple and Open AI could be a negative for [Google parent] Alphabet stock, opening the door for increasing AI usage as an alternative to search,” wrote Bank of America analysts in a research note Tuesday morning.
But Apple’s software engineering chief Craig Federighi threw other companies a bone in his unveiling of the Apple-OpenAI deal. After laying out ChatGPT’s uses on iOS 18, he quickly noted that Apple “also intend[s] to add support for other AI models in the future.” That paves the way for future deals with other chatbot providers such as Google, Anthropic, and Microsoft.
Bank of America analysts said, indeed, a “door seems open for Gemini” and noted the impact of OpenAI’s Apple deal will likely be “smaller than expected.” Morgan Stanley analysts said they “continue to believe [Apple] is more likely than not going to leverage [Google] and Gemini.” Indeed, Federighi specified that Apple would work with Google, in particular, in a post-keynote conversation reported by Tech Crunch. “We’re looking forward to doing integrations with other models, including Google Gemini, for instance...” he said.
Apple’s announcements were good for Google in an indirect way, too, Morgan Stanley analysts said. That’s because Morgan Stanley analysts think Google’s generative AI offerings for Android make it a stronger product than Apple’s iOS 18 update.
Apple’s AI strategy is distinct from its direct competitors. Rather than creating singular, closed loop AI tools like Microsoft, Google, OpenAI, and others, Apple’s AI paves the way for multiple technology partners (similar to Salesforce’s Einstein Copilot). But just as that pathway leaves the door open for Google’s Gemini, Apple’s multitude of possibilities for new technology partnerships for iOS is “an ongoing concern for Google’s long-term competitive moat,” said Bank of America analysts.
Editor’s note: This article was updated to include Federighi’s comments to Tech Crunch that Apple is looking to work with Google in the future.