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.
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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.
Google's strategy of integrating its AI, Gemini, directly into its widely-used Chrome browser gives it a massive distribution advantage over standalone tools like ChatGPT. By making AI a seamless part of the user's existing workflow, Google can make its tool the default choice, which marketers must optimize for.
Google's competitive advantage in AI is its vertical integration. By controlling the entire stack from custom TPUs and foundational models (Gemini) to IDEs (AI Studio) and user applications (Workspace), it creates a deeply integrated, cost-effective, and convenient ecosystem that is difficult to replicate.
Contrary to popular narrative, Google's AI products have likely surpassed OpenAI in monthly users. By bundling AI into its existing ecosystem (2B users for AI Overviews, 650M for the Gemini app), Google leverages its massive distribution to win consumer adoption, even if user intent is less direct than visiting ChatGPT.
By integrating Google's Gemini directly into Siri, Apple poses a significant threat to OpenAI. The move isn't primarily to sell more iPhones, but to commoditize the AI layer and siphon off daily queries from the ChatGPT app. This default, native integration could erode OpenAI's mobile user base without Apple needing to build its own model.
Google's Gemini is integrating user data from Gmail, Photos, and Search. This isn't just a feature; it's a competitive strategy to build a moat. By leveraging its proprietary ecosystem of personal data, Google shifts the battleground from raw model performance to deep personalization that competitors like OpenAI cannot easily replicate.
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.
Initially, AI chatbots were seen as a threat to Google's search dominance. Instead, Google leveraged its existing ecosystem (Chrome, Android) and distribution power to make its AI, Gemini, the default on major platforms, turning a potential disruptor into another layer of its fortress.
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 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.
