Apple to Pay ~$1B a Year for Gemini: The New Siri Runs on a 1.2-Trillion-Parameter Google Model

Per Bloomberg and TechCrunch, in November 2025 Apple neared a deal to pay Google about $1 billion a year for a custom 1.2-trillion-parameter Gemini model to power the all-new Siri, targeted for spring 2026 with an iOS update. Google and Apple later issued a joint statement confirming a multi-year collaboration basing next-generation Apple Foundation Models on Gemini and Google Cloud.

It is a rare admission from Apple that in-house AI fell short: after repeated Siri delays and a lukewarm Apple Intelligence, it is using Google's model to get the experience right first while continuing internal development.

Deal Mechanics: A Custom Model, Not Gemini-Branded Siri

Per Bloomberg, Apple is buying a custom 1.2-trillion-parameter Gemini variant that runs on Apple's own Private Cloud Compute infrastructure — user data never touches Google's servers, and no Gemini branding appears in the interface. That explains the careful wording of the later joint statement ("next-generation Apple Foundation Models will be based on Gemini and Google Cloud"): for Apple it is a technology substrate; for users it is still just Siri.

Why Google and Not the Others

Apple reportedly evaluated OpenAI and Anthropic before landing on Google. The choice tracks a decade-plus of search-default cooperation — the two already operate a commercial and legal framework worth tens of billions a year. And at roughly $1 billion annually, the price is a rounding error against Apple's services revenue, bought in exchange for certainty on the Siri turnaround.

What It Means for Each Side

For Apple: it buys time — in-house frontier work continues, but the new Siri cannot wait; the cost is placing a core experience, for a phase, in the hands of its biggest ecosystem rival. For Google: another gateway-scale win after the search-default deal — Gemini now powers AI experiences on both Android and the iPhone, replicating at the model layer the gateway position it held in the search era. And with antitrust courts having just finished reviewing the two companies' search arrangement, this new pact is certain to draw regulatory attention.

Our Take

At the industry level, the deal confirms a trend: frontier models are becoming heavy-asset infrastructure owned by a few players, and even device makers as strong as Apple now rent rather than build. In the models-as-infrastructure era, vertical integration is no longer the default answer.