Despite OpenAI securing an initial Siri integration, Google's long-standing relationship with Apple won the more significant partnership. This shows that for AI model distribution, powerful incumbent relationships can be more decisive than speed, pressuring challengers like OpenAI to build their own hardware and distribution channels.

Apple is avoiding massive capital expenditure on building its own LLMs. By partnering with a leader like Google for the underlying tech (e.g., Gemini for Siri), Apple can focus on its core strength: productizing and integrating technology into a superior user experience, which may be the more profitable long-term play.

In a major strategic move, Apple is white-labeling Google's Gemini model to power the upcoming, revamped Siri. Apple will pay Google for this underlying technology, a tacit admission that its in-house models are not yet competitive. This partnership aims to fix Siri's long-standing performance issues without publicly advertising its reliance on a competitor.

By integrating Gemini into Siri, Google acquires massive distribution and user data, creating a powerful product flywheel. This advantage, combined with proprietary chips and vast resources, positions Google ahead of competitors like OpenAI in the AI race, despite not having the leading consumer brand.

Unlike search, where Apple charges Google $20B for access, Apple is reportedly paying to use Google's Gemini AI. This reversal shows that elite AI technology currently holds more leverage than even Apple's massive user base.

Apple's internal AI software, including Siri, has faced significant delays. The strategic partnership to use Google's Gemini model has given Apple the confidence to accelerate its AI hardware roadmap, like the new wearable pin, by decoupling hardware innovation from its slower internal software development.

Apple's partnership with Google for Siri was less about Google's technological superiority and more a strategic move to avoid empowering OpenAI, which is increasingly becoming a direct competitor in consumer hardware like smart glasses and audio devices. Giving OpenAI access to Apple's ecosystem would train a future rival.

According to Bloomberg's Mark Gurman, Apple's 2018 hiring of Google's AI chief was a strategic disaster that left the company far behind in AI. The subsequent multi-billion-dollar deal to integrate Google's Gemini model into Siri is a stark admission of this failure, forcing Apple to rely on a direct competitor for core functionality.

By licensing Google's Gemini for Siri, Apple is strategically avoiding the capital-intensive foundation model war. This allows them to focus resources on their core strength: silicon and on-device AI. The long-term vision is a future where Apple dominates the "edge," interoperating with cloud AIs.