Investors were delighted with Alphabet (GOOG 9.96%) (GOOGL 10.22%) stock this morning after a report that the company was in talks with Apple (AAPL -0.35%) to make its Gemini AI chatbot available on the iPhone.
Although talks are ongoing and no deal has been announced, the report led to a surge in Alphabet shares on Monday as investors seemed to believe it was a sign that the company was overcoming the negative publicity and other challenges that have been associated with its AI technology thus far. As of noon ET today, the stock had gained as much as 7.8%, approaching an all-time high, while Apple was up as much as 3%.
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Is this a game changer for Alphabet?
Today's gain was no small move for Alphabet, which had added more than $100 billion in market cap at one point based on the report. But investors should be aware that the news has not been confirmed at this point.
Bloomberg reported this morning that Apple is in talks to license Gemini for some new additions to the iPhone software later this year, though it's unlikely that a deal would be announced until June, when Apple holds its annual developer conference.
Apple has also held talks with OpenAI about using its generative AI model, so it's unclear if an agreement between Apple and Alphabet will be finalized.
Given the uncertainty in the partnership, the news isn't a game changer for Alphabet. But a tie-up with Apple would certainly be a big step in the right direction for the Google parent, which has stumbled with its AI strategy thus far after Bard flopped in its launch and the rebranded Gemini chatbot has faced criticism as well.
Alphabet has already announced a partnership with Samsung to include its generative AI technology on its newest Galaxy phones, showing that the chatbot technology is gaining adoption.
For now, the new AI technology is unlikely to be a major revenue driver for Alphabet, but establishing relationships that could become entrenched for decades is important. Keep an eye out for more news on the arrangement between the two tech leaders since it's likely to move Alphabet stock in the future.
