Exclusive: Apple and Google Gemini Alliance, Set to Redefine AI with Unstoppable Force

Alphabet, Google’s parent company (NASDAQ: GOOGL), rose by 4.6% yesterday after Bloomberg said that Apple (NASDAQ: AAPL) might consider adding Google Gemini to the iPhone’s AI. Apple and Google Gemini may work together on artificial intelligence (AI). This is similar to their previous deal in search, which regulators closely watched.

Google and Apple working together on AI could be very good for both companies as they try to become the leaders in AI, even though antitrust officials are likely to be against it.

With its investment in OpenAI, Microsoft (NASDAQ: MSFT) is now the leader in generative AI. Apple will have to work hard to catch up in the AI field. Microsoft and Apple are both leaders in their fields, but Apple can catch up by working with Google. This partnership also gives Apple a direct way to get ahead using Google Gemini, one of the most powerful large language models (LLMs). Because of these things, I still have a good opinion about AAPL and GOOGL.

Apple: It Might Be Smart To Work With A Top AI Company

Even though I’m sure Apple could add its LLM to its products, I believe Google is the better choice at this early stage of the AI boom. Why? Even though LLMs have gotten better recently, they can still hallucinate (make things up out of the blue for no reason).

We won’t know when our strong, hallucination-free LLM is ready to sell. For whatever reason, I don’t think Apple would put out an LLM product that is still a work in progress. They usually release polished products that are ready to fly.

Even the newest versions of Google Gemini and ChatGPT-4 Turbo are still works in progress, no matter how powerful and impressive they are.

There is a flaw in both LLMs, especially now that hallucinations are still happening a lot in AIs. It may be some time before LLMs are perfected to the point where mistakes are uncommon or even impossible.

Many think that error-free AI is the holy grail of AI, but it might not be here for another quarter or even a few years. But because generative AI technologies are improving at exponential, not linear, rates, LLMs that don’t cause hallucinations are much closer than most of us think.

Most people have come to terms with the fact that even the best LLM will have rare problems. People who use these kinds of LLMs can check the sources to ensure they’re not having a dream. Fact-checking can be a pain when using LLMs like Gemini or GPT-4, but it’s not a huge problem. You can also use an old-fashioned search tool instead.

What Might Happen Next With The AI Partnership Between Google And Apple?

Apple has nothing to gain by rushing an LLM product to market right now, especially since LLMs today are prone to mistakes, bad press, lawsuits, public anger, and other bad things.

Apple could replace Google Gemini with its LLM at the right time, maybe when it is more polished. This is similar to how Apple removed Intel (NASDAQ: INTC) from Mac devices when it was ready to start its own Apple Silicon.

At this early stage of the AI boom, Apple can use Gemini to get all the good things about AI without dealing with the bad things. The Gemini LLM, not Apple, is to blame if something goes wrong. In the meantime, Alphabet should gain ground as Gemini learns Apple’s golden install base of billions of people.

In the long run, Gemini in the iPhone could help Google and Apple beat Microsoft in the LLM race. A possible relationship between Google and Apple will be interesting to watch grow. However, if a deal is made, GOOGL stock could see a big increase in value, maybe even getting closer to the value of MSFT stock, which is Alphabet’s best AI competitor. This is true even if Alphabet has to pay Apple a lot.

GOOGL stock still has room to go at just 25.4 times trailing price-to-earnings (P/E) if it wants to catch up to MSFT stock, which trades at 37.7 times trailing P/E. This is despite rising 4.6% in one day.

Do Analysts Think GOOGL Stock Is A Good Buy?

Analysts say Alphabet stock is a Strong Buy. 28 Buys and 8 Holds have been given out in the last three months. With an average price goal of $165.09, Alphabet stock could increase 12.3%.

Should You Buy AAPL Stock, According To Analysts?

According to experts, there have been 16 Buys, 9 Holds, and 1 Sell on Apple stock in the last three months. At an average price target of $204.86, Apple stock has 16.3% more growth potential.

A deal between Google and Apple for Gemini AI would seem good for both companies as they try to get ahead in the race for creative AI. We only have a story from Bloomberg about possible talks between the two companies, so keep that in mind. 

Because of all the talk, nothing is set in stone yet, even though recent market activity makes it look like a deal has been made. In any case, Apple will likely look for an AI partner as it looks for a “backstop” in this early (and not very finished) stage of generative AI.