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A quick take on the Apple–Google AI partnership I was on the MM Podcast about a month and a half ago, where we talked about the Apple–Google AI partnership. Here are the main takeaways from that part of the conversation (from ~38:50 to 45:20). I’ve lightly edited the text below to make it easier to read: 1. Apple is facing two short-term challenges in its in-house AI development that are effectively pushing it toward partnering with Google: (1) this year’s WWDC AI showcase can’t afford another disappointment, and (2) as cloud AI continues to advance, user expectations have risen to a point where even fully delivering on past promises around Apple Intelligence and Siri may no longer be enough—creating an urgent need for a more powerful on-device AI model. 2. While on-device AI isn’t expected to drive hardware shipments in the near term, this partnership helps Apple relieve short-term pressure from multiple fronts. That said, it’s only a matter of time before AI becomes central to hardware, the OS, and the overall user experience. Over the long run, Apple still faces the challenge of gaining stronger control over its core AI technologies. 3. Tesla’s FSD is a clear example of AI becoming the core of both the device and the user experience. If Tesla’s FSD algorithms came from other vendors, its competitive advantage—and its valuation multiple—would almost certainly be lower than they are today. 4. Apple’s in-house AI server chips are expected to enter mass production in 2H26, with its own data centers planned to come online in 2027. This likely means Apple’s demand for on-device AI could start to grow more meaningfully from 2027 onward.