The statement landed Sunday night, timed for the dead hours when companies want news filed but not read. "After careful evaluation, we determined that Google's technology provides the most capable foundation for Apple Foundation Models," Apple told CNBC. Translation: Siri lost. Gemini won. The company that once mocked Google's privacy record now needs Google's AI to power its most personal product.
The Breakdown
• Apple pays Google ~$1 billion/year for a custom 1.2 trillion parameter Gemini model, 8x larger than Apple's own AI
• The deal reverses a decade of Google paying Apple $20 billion annually for Safari search defaults
• AI chief John Giannandrea was reassigned in summer 2025 and left Apple entirely by December
• Google's market cap surpassed Apple's for the first time since 2019, briefly touching $4 trillion
The $1 billion confession
Apple will pay Google roughly $1 billion annually for access to a custom 1.2 trillion parameter Gemini model. Put that in perspective. Apple's own cloud-based AI tops out at 150 billion parameters. The difference isn't horsepower. It's category. Apple built a calculator. Google built the mainframe it connects to.
The deal flips a decade-long financial arrangement on its head. Google currently pays Apple roughly $20 billion per year to remain Safari's default search engine. Now money flows the other direction too. Apple becomes both Google's customer and its distribution partner, a dependency that should worry anyone who remembers Apple's positioning as the privacy-first alternative to data-hungry competitors.
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