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Samsung's Galaxy AI has shaken up the mobile AI race, and Apple appears ready to respond with a hefty price tag. Reports suggest Apple will pay Google nearly $1 billion a year for a custom Gemini model to boost Apple Intelligence and supercharge Siri — a move that reshapes competitive dynamics between Apple, Google and Samsung.
Why Apple is paying for Gemini
Bloomberg says Apple is close to an agreement to license a tailored version of Google's Gemini AI. The numbers tell the story: Apple’s in-house model reportedly has about 150 billion parameters, while Google’s Gemini model runs around 1.2 trillion parameters — a much larger and more capable foundation for next-gen assistant features.
Instead of rebuilding from scratch, Apple seems to be betting on a third-party model to accelerate progress. The reported annual fee—roughly $1 billion—sounds large until you remember Google already pays Apple far more to remain Safari’s default search provider. Strategically, this deal would be an investment in catching up to Galaxy AI’s early lead.
Privacy, but on Apple’s terms
Google isn’t simply handing over its model to run in Google's cloud. The report notes Apple will operate the custom Gemini variant on its Private Cloud Compute servers. That distinction matters: Apple has long leaned on privacy as a brand differentiator, and running the model on its own infrastructure helps protect that narrative while still leveraging Google’s advanced tech.
What users can expect
- Improved Siri responses and contextual understanding powered by Gemini.
- AI features integrated into Apple Intelligence, potentially available in spring 2026.
- Private Cloud Compute infrastructure keeping model execution within Apple’s controlled environment.
How this changes the mobile AI landscape
Samsung took a different path: Galaxy AI rolled out by integrating Google’s Gemini capabilities directly into Galaxy devices, giving Samsung a head start and some marketing shine for both companies. Apple’s potential licence reverses that dynamic — rather than relying solely on internal models, Apple would combine its hardware and ecosystem strengths with Google’s AI muscle.
Could Samsung respond by renegotiating its own arrangements or doubling down on Samsung-branded AI services? Possibly. For now, the move signals a broader reality: mobile AI is expensive, strategic, and increasingly driven by partnerships between platform owners and AI model providers.
Why it matters beyond the tech press
This isn’t just a corporate spending story. If Apple’s deal goes through, consumers could see noticeably smarter assistants, better on-device AI features, and tighter privacy guarantees — but they’ll also be part of a market where a few companies control the most powerful models. That shapes not only product experiences but also how competition and innovation play out across the industry.
In short: Apple may be writing a big check to close the Galaxy AI gap, and the ripple effects could define mobile AI for the next few years.
Source: sammobile
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