Apple and Google yesterday announced a multi-year partnership that puts Google’s Gemini at the heart of Apple Intelligence, including an upgraded Siri coming this spring. Apple also evaluated OpenAI and Anthropic, but chose Google. That tells you everything you need to know about where the AI industry stands in January 2026.
According to a joint statement from both companies, Google will build a custom 1.2 trillion parameter Gemini model specifically for Apple. The fruit company is planning to run the models in their own data centers.
Apple’s statement was unusually direct: “After careful evaluation, we determined that Google’s technology provides the most capable foundation for Apple Foundation Models.” The announcement pushed Google’s market cap past $4 trillion for the first time, making it the fourth company to reach that milestone after Nvidia, Microsoft, and Apple itself.
Google now has AI distribution deals with Apple and Samsung. As I like to rhetorically ask, “Who is going to be Google for AI? Google.”
This is an interesting twist. The pundits had been split on whether Apple would offer a model garden or choose one provider, which raises questions about antitrust. A December 2025 court ruling prohibits Google from entering exclusive default agreements lasting beyond one year. The Apple deal is “non-exclusive” and “multi-year.” The legal architects on both sides clearly structured this to survive regulatory scrutiny while delivering what amounts to exclusivity in practice.
One more thing: Apple isn’t paying Google to win the AI race. Apple is paying Google so it can focus on what it actually sells: devices, services, and experiences. The value capture in AI seems to be shifting away from model providers and toward companies that integrate AI into products people actually use. I’m not sure it’s an actual trend, but it’s worth watching this quarter.
Author’s note: This is not a sponsored post. I am the author of this article and it expresses my own opinions. I am not, nor is my company, receiving compensation for it. This work was created with the assistance of various generative AI models.