OpenAI (OPAI.PVT) solidly led the AI market and seemed poised for a potential deal with Apple (AAPL) in 2025. But Google’s (GOOGL) launch of Gemini 3 and a new deal with the iPhone maker have changed the game.
Google and Apple on Monday revealed a multi-year collaboration in which Google’s Gemini models and cloud technology will power the next generation of Apple’s AI, including a long-awaited new version of its voice assistant Siri coming this year. Bloomberg had previously reported that the two tech giants were planning a deal in November, saying the agreement would involve Apple paying Google $1 billion annually, though the companies did not respond to a request to confirm that figure.
On top of the reported licensing revenue, Google is set to see a boost in cloud revenue from the collaboration, Wall Street analysts told Yahoo Finance. And because Google’s own AI models are now positioned to run on the vast majority of smartphones worldwide — both iPhones and Android devices — the company is effectively disrupting its Search business on its own terms rather than ceding that shift to a competitor like OpenAI. Overall, the Apple deal has all but cemented Google’s dominance in a heated AI market, with the news sending Google parent Alphabet’s market capitalization north of $4 trillion for the first time on Monday.
At the same time, analysts said, the news marked a major setback for the ChatGPT developer.
“ It’s a huge loss for OpenAI,” said DA Davidson analyst Gil Luria. “ The fact that OpenAI didn’t get that deal with Apple sets them back quite a bit.”
Hedgeye Risk Management analyst Andrew Freedman added, “ It’s a landmark deal, and it sets the stage for Google to continue to dominate.”
He called it a “blow” to OpenAI.
“As Gemini continues to grow in usage and adoption as a general-purpose LLM [large language model], it absolutely presents a risk and makes it harder for OpenAI to continue to take share,” Freedman said.
Google took OpenAI by surprise in late 2025, as the launch of its Gemini 3 model surpassed rival AI models on industry benchmarks. Sam Altman declared a “code red,” and OpenAI quickly unveiled a new model, GPT-5.2, to mixed reviews about how it stacked up to Gemini 3.
Before Google began closing the gap on OpenAI’s lead, Apple inked a partnership with the AI developer to roll out ChatGPT on its iPhones in 2024, marking Apple’s first big agreement with an AI developer as its own artificial intelligence strategy remained murky. Apple reportedly mulled using OpenAI’s tech to power its next-generation voice assistant, Siri.
