To The Moon

Recently $Apple(AAPL)$ and $Alphabet(GOOGL)$ are both in trouble, for their lagging behind being investors' doubts about their AI development.

For Apple, both main pillars are facing a crisis:

1. The flagship product iPhone is just hitting a "slump" year, with a "price drop" and "speed drop" in the Greater China region, and even facing lawsuits from investors;

2. Apple store is cutting fees and still facing controversy.

For Google, it is uncertain whether AI will become its "spear" or "shield":

1. Although Gemini is continuously iterating, it still has a gap of approximately half a year compared to OpenAI;

2. AI robots are to some extent replacing browser searches, bringing uncertainty to the advertising business.

Therefore, it is not surprising that the following spy photo was leaked (pictured are Apple CEO Cook and Google CEO Pichai conversing)

According to Bloomberg, Apple is in "active negotiations" to authorize Gemini's AI model to integrate its AIGC function into the upcoming iOS 18 later this year, including the ability to create images and write articles based on simple prompts.

Previously, the two companies had been negotiating over default browser search engines, with Google paying Apple $18 billion annually to maintain its default search engine status on the iPhone.

We believe that deep collaboration on AI between the two will:

1. Bring tens of billions of potential users to Gemini

2. Bring traffic to Google's search engine, placating advertisers' concerns

3. Since AI is embedded in the iPhone and doesn't even need to be connected to the Internet, it can directly enhance iPhone performance.

Of course, this is still just a rumor, as there are some other news items:

1. Apple recently held discussions with OpenAI about adopting its AI model;

2. Apple is unlikely to announce any deals before its annual Worldwide Developers Conference in June;

3. Apple has just abandoned its car plans, transferring 2000 people and investing in Canada's DarwinAI;

Apple's Strategic Move: Acquiring DarwinAI - AI TECH PASS

For investors, this is more likely a way to "recover" the current stock price decline, The actual implementation of cooperation may not necessarily go smoothly.