Google’s parent company, Alphabet (NASDAQ:GOOGL), experienced a significant surge in its stock price following a Bloomberg report suggesting that Apple (NASDAQ:AAPL) may be considering partnering with Google Gemini, an AI technology, for integration into its iPhones. This potential partnership between two tech giants has raised concerns among antitrust regulators, similar to the scrutiny their previous search deal faced.
However, this collaboration could prove to be a massive win for both companies as they strive to gain a stronger foothold in the AI race. Microsoft (NASDAQ:MSFT) currently leads the way in generative AI with its OpenAI stake, so Apple needs to catch up quickly. Teaming up with Google could provide Apple with access to Google Gemini, one of the most powerful large language models (LLMs), and help level the playing field.
While Apple could develop its own LLM, Google appears to be the better option at this early stage. Although LLMs have improved significantly recently, they still have limitations, including occasional hallucinations or errors. Apple, known for its polished products, is unlikely to release an LLM that isn’t ready for the market, so partnering with Google allows them to benefit from the technology without the associated risks.
In these early stages of the AI boom, using Gemini could be advantageous for Apple. Any mistakes or negative outcomes would be attributed to Gemini, not Apple. Furthermore, Alphabet stands to gain traction as it introduces Gemini to Apple’s massive install base, potentially surpassing Microsoft in the LLM race.
The future of a Google-Apple AI partnership remains uncertain, as the potential deal is still in the discussion phase. However, if the partnership does materialize, it could lead to a considerable increase in the valuation of Google’s stock, bringing it closer to that of Microsoft’s top AI peer.
According to analysts, Alphabet stock is currently rated as a Strong Buy, with a price target suggesting a 12.3% upside potential. Apple stock, on the other hand, is rated as a Moderate Buy, with a price target indicating a 16.3% upside potential.
Overall, the potential collaboration between Google and Apple in the field of AI presents exciting possibilities. It is important to note that the rumors are not confirmed, but if the partnership does come to fruition, it could have significant implications for the industry. As generative AI continues to advance rapidly, it will be interesting to see how this potential partnership evolves and what it means for the future of technology.
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