What's a billion between friends?
Office Hours Research #Q&A #WWDC · 3 comments
by Horace Dediu
An Office Hours question asked by Bob V., June 9, 2026.
Q: The Apple–Google deal for the frontier model is multi-year with no known end date. What happens after — and what is Google really getting out of it?
When that deal came out, people jumped to conclusions. I talked to Laura Martin {of Needham), who assumed Google would run Siri, and thus get all the data from Apple. Since that data was the real gold mine, even without much revenue from Apple, Google would begin to control the user’s data and experience. This would be check mate to Apple. I was skeptical from the start that Apple would ever release end-user data. That has now been made clear: this is a technology licensing deal including some Google training data but no services from Google and only some cloud capacity from Google using Nvidia chips but running Apple's own Private Cloud.
The follow-up sessions after the keynote answered most of it. Federighi and his staff have been adamant that Google gets nothing — certainly no data. Only one of the many models accessed through Core AI runs on Google Cloud, outside Apple’s own private servers. It’s the most powerful one, but it’s a world model, and Google has no access to anything. The tools aren’t Google’s either. It’s not Gemini. It’s not their image model. It’s Apple’s own foundation models, several of them, and one happens to run with Google in the cloud, privately and securely.
People assumed far more than what is actually happening here. Google's contribution is also probably swappable: at some point Apple may decide to do it themselves. And let’s not forget that Google sends Apple more than twenty billion dollars a year. So now Apple sends one back. What’s a billion between friends?
Apple is not going to give away the single most important thing it has, which is its relationship with the customer.
Editor’s Note: This was one of the questions asked by participants in Asymco’s June 2026 Office Hours live Q&A session, open to Asymco One subscribers.
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3 comments
FredHS ·
When Apple launched the iPhone they only worked with AT&T to provide the wireless services.
Today, Apple has picked one Cloud AI service provider and the very beginning of new multi-decade version of personal computing.
Apple has swapped out chip foundries, CPU chip architectures, etc.
Apple focuses relentlessly on where they provide durable advantages that enrich people's lives, where their IP dominates what they sell. They don't do commodity, large physical CAPEX stuff. Maybe that's why the cancelled Titan.
deemery ·
Laura Martin (of Needham), who assumed Google would run Siri, and thus get all the data from Apple.
That just shows how appallingly ignorant Laura Martin is of Apple, its culture, its approach to technology, its approach to supply chains, etc, etc, etc.
Sacto Joe ·
Alphabet and Apple aren't friends. Alphabet/Google created Androids that basically ripped off Apple intellectual property by hiding behind the "open-source" and "profitless" figment. That's of course why Apple went after Samsung and not Alphabet/Google; Samsung couldn't claim to being open-source and profitless.
Then Alphabet/Google developed Google Maps, and made sure Android had a superior version, eventually moving Apple to make its own Maps app.
So of COURSE Apple was going to hold Gemini at arms length to the maximum degree possible. But that took a considerable amount of time and effort to put into place. That effort, however, is largely done.
So what did Alphabet get out of it? Has anyone checked out their Market Cap lately?