Despite its hardware prowess, Apple is poorly positioned for the coming era of ambient AI devices. Its historical dominance is built on screen-based interfaces, and its voice assistant, Siri, remains critically underdeveloped, creating a significant disadvantage against voice-first competitors.

Apple's historic commitment to user privacy prevented it from using the vast data pools competitors leveraged for AI. This created a technical disadvantage, forcing Apple to use its marketing prowess ('lipstick') to mask a technologically inferior AI product ('the pig').

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.

Contrary to the narrative that Apple is wisely waiting out the AI hype, reporter Mark Gurman asserts their AI strategy has been a "disaster." He claims the tech giant was "completely caught off guard" by ChatGPT and its anti-chatbot stance was a major mistake, revealing a significant strategic miss, not a deliberate, patient approach.

While critics say Apple "missed AI," its strategy of partnering with Google for Gemini is a masterstroke. Apple avoids billions in CapEx, sidesteps brand-damaging AI controversies, and maintains control over the lucrative user interface, positioning itself to win the "agent of commerce" war.

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.

While Apple faltered with AI attrition and delayed features, Google executed a rigorous AI-first strategy throughout 2024 and 2025. This involved restructuring its AI organization and releasing groundbreaking models, directly leading to a stock surge that allowed it to overtake Apple's market capitalization for the first time since 2019.