Back in December, Sundar Pichai had some big news to share.
"Every technology shift is an opportunity to advance scientific discovery, accelerate human progress, and improve lives," Pichai, the CEO of Google parent Alphabet wrote in a blog post. "I believe the transition we are seeing right now with AI will be the most profound in our lifetimes, far bigger than the shift to mobile or to the web before it."
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Pichai said that millions of people were using generative AI across the search engine giant's products "to do things they couldn’t even a year ago."
"Now, we’re taking the next step on our journey with Gemini, our most capable and general model yet, with state-of-the-art performance across many leading benchmarks," he said.
Alphabet said it was making three versions of Gemini, originally known as Bard, each of which is designed to use a different amount of processing power.
The most powerful version is designed for data centers, and the smallest will run efficiently on mobile devices.
Analyst sees big AI for Apple Intelligence
Google recently rolled out its new YouTube Music Gemini extension, which lets users connect YouTube Music to the AI bot to access their music library. Reports indicate that Google is planning a similar move for Spotify (SPOT) .
Gemini is Google's equivalent of OpenAI's ChatGPT, a large-language model AI chatbot that launched on Nov. 30, 2022, and is credited with starting the artificial intelligence revolution.
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Analysts took another look at Gemini in light of Apple's (AAPL) 2024 Worldwide Developers Conference, the company's annual information technology event, on June 10.
Among other things, Apple unveiled Apple Intelligence, which is the company's push into AI.
During the conference, Apple announced a partnership with OpenAI to integrate ChatGPT into Apple’s digital assistant, Siri.
TheStreet Pro's Chris Versace told readers that Apple Intelligence "has the potential to be one of the leading ways consumers utilize AI, in part because of the Apple install base, but also because of Apple’s focus on privacy."
"The key takeaway, however, was Apple Intelligence will only work with a handful of its newer models," he said. "This supports our expectation for the coming AI-on-device upgrade cycle."
After Apple announced a series of new Al features for iPhone and the partnership with OpenAI, Bank of America Securities analysts called the event a "middle of the road outcome for Alphabet sentiment."
"From an Alphabet investor perspective, there have been concerns, which we have shared, that any deal between Apple and Open AI could be a negative for Alphabet stock, opening the door for increasing AI usage as an alternative to search," BofA said.
'Door open for Gemini,' analyst says
Apple's statement about expanding support to other LLMs, or large language models, opens up the possibility of integrating Gemini into iOS to handle some AI activity or more specialized tasks, the analysts said.
BofA remains constructive on Gemini integration growth across the Google ecosystem and thinks broader AI overviews rollout could drive higher search usage and opportunities for incremental ad spend on the platform.
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The firm maintained a buy rating and a $200 price target on Alphabet shares.
Following the keynote event and release of Apple Intelligence, Morgan Stanley analyst Brian Nowak said Apple's use cases do not appear to present a disintermediation threat to broad-based internet Search, which highlights Alphabet's need to develop and roll out more of its own products.
In addition, Apple intends to add support for more AI models, which Nowak said he believes leaves the door open for Google's Gemini.
The analyst said the start of WWDC made him more confident in Alphabet's GenAI leadership and noted that the next Android GenAI offerings seem superior to those on iOS.
Nowak kept an overweight rating and $195 price target on Alphabet shares.
Evercore ISI analyst Mark Mahaney raised the firm's price target on Alphabet to $225 from $220 and kept an outperform rating on the shares after surveying consumers' adoption and usage of Gen AI Search with a 1,000-respondent U.S. survey leading up to Apple's WWDC event.
The sustainability of Google's search dominance has been a major area of investor debate, but Mahaney said that he came away from the survey more constructively regarding Google's competitive position in both core search and Gen AI search.
The analyst added that Apple's comments of intending "to add support for other AI models in the future" leave the door "very widely open" for an Alphabet partnership down the road, which the firm views as probable.
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