In today’s big story, we’re looking at what a potential partnership between Google and Apple over AI features would mean for both companies and the wider industry.

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Apple is considering integrating Google’s AI model, Gemini, into the iPhone.

Nothing is finalized, so the potential deal terms aren’t clear. But the broad strokes of the arrangement could see Apple license Gemini to power new features on iPhone software as soon as this year, according to a report from Bloomberg’s Mark Gurman.

The rumors come at the perfect time for both sides.

For weeks, Google has been publicly trashed over Gemini being too “woke.” The criticism was so loud CEO Sundar Pichai acknowledged the company “got it wrong” in a memo. More broadly, insiders have questioned if Google can still be considered the tech world’s vanguard of “cool.”

Meanwhile, Apple has drawn attention for what it’s not doing in AI. The company has been noticeably quiet around its AI plans compared to peers like Google, Microsoft, Meta, and Amazon.

CEO Tim Cook alluded to a bigger announcement about the tech later this year at Apple’s annual shareholder meeting. But the company seems to be playing catch up, as it reallocated resources from its scrapped electric vehicle to focus on generative AI.

By teaming up, Google’s Gemini gets a much-needed vote of confidence and access to the iPhone’s sizable user base. And Apple keeps pace in the AI race by outsourcing some of the messy bits of the business, Business Insider’s Hasan Chowdhury writes.

Wall Street seems to agree. Both companies’ shares rallied off the back of the report, BI’s Phil Rosen writes.

Google has paid Apple to be the default search provider on the iPhone for years. Apple gets a nice chunk of change — reportedly $18 billion in 2021. Google maintains its place as the go-to search engine on the internet. It’s a win-win.

The tie-up isn’t without its critics, though. It’s a key piece of the Department of Justice’s lawsuit against Google for “anticompetitive and exclusionary” behavior in a landmark trial for Big Tech that kicked off last year.

So even if Apple and Google come to an agreement, they could still face some serious regulatory pushback.

(And to be clear, Bloomberg’s report mentioned Apple had discussions with OpenAI, the creator of ChatGPT, about a similar arrangement, so there’s still a long way to go.)

But if the history of Apple-Google deals has taught us anything, their combined power is almost unmatched.

When PGA of America wanted to develop technologies to enhance the game, they chose T-Mobile for Business as their exclusive 5G partner — and aced the hole. Our 5G solutions are improving player performance and expanding coaching tools. And data-driven broadcasts and HD POV cameras are giving fans unrivaled views. This is game-changing innovation. This is PGA of America with T-Mobile for Business.

🔔 Before the opening bell: US stock futures trade flat in the premarket after racking up decent gains on Monday.

2. Wall Street is feeling optimistic about a soft landing. It’s “risk-on” for many investors, who are betting the economy will be fine. The Street is mostly bullish thanks to strong economic growth and the prospect of interest rate cuts being in the pipeline.

3. Japan’s central bank raised interest rates for the first time in 17 years. The last time the Bank of Japan hiked borrowing costs was in February 2007. The market’s response to its move was muted, with Tokyo’s benchmark Nikkei 225 index closing 0.7% higher on Tuesday.

2. Here’s what creators were talking about at SXSW. While AI was a popular topic of discussion, many panels failed to talk about its downsides. Meanwhile, some creators and employees said they were “bored” of talking about a potential TikTok ban.

3. Nvidia unveiled its next-generation chip. CEO Jensen Huang revealed the Blackwell B200 GPU at the semiconductor giant’s “Woodstock of AI” event on Monday. The chips “are the engine to power this new industrial revolution,” he said.

2. 5-Hour Energy’s billionaire owner elbowed his way into publishing Sports Illustrated — now he’s lost it. Late last year, Manoj Bhargava took control of Sports Illustrated publisher Arena Group, swiftly laying off dozens of employees. His erratic behavior and failure to pay a licensing fee, however, resulted in him losing SI.

3. Reddit’s CEO defended his massive pay package. Steve Huffman said in a video Q&A that his $193 million compensation package was based on both salary and stock. Some Quora, Reddit, and X users feel the amount is too high for a platform that doesn’t pay its moderators and hasn’t been profitable thus far.

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• A Lady Gaga Google Search shows how AI is upending the world’s most profitable online business. ‘Site owners are terrified.’

• US presidential primary elections will be held in Arizona, Florida, Illinois, Kansas, and Ohio.
• NCAA March Madness kicks off today.

Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. George Glover, reporter, in London.

Get in touch. Email us at insidertoday@insider.com

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