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The Crisis Nobody Saw Coming
June 2024. Apple’s Worldwide Developers Conference. CEO Tim Cook and software chief Craig Federighi promise revolutionary AI. Siri will finally be smart. Your iPhone will understand context.
Fast forward to March 2025. Apple quietly admits: Those revolutionary Siri features? Not coming. Not this year. Maybe next year.
By mid-2025, internal testing showed the new Siri didn’t compete with today’s chatbots. Engineers seemed to be frustrated. Talent was leaving. And Apple’s AI chief, John Giannandrea, was quietly losing Tim Cook’s confidence.
The company that revolutionized phones was suddenly at risk of missing the biggest technology shift since the internet.
The Scramble for a Lifeline
Here’s what was happening behind the scenes.
Apple had been building its own AI models, hoping to power Siri and Apple Intelligence entirely in-house. That’s the Apple way, control everything from hardware to software to services. Never depend on anyone else.
But by June 2025, a report confirmed what most inside Apple already knew: Apple was in early talks with both Anthropic and OpenAI about supplying models to rebuild Siri. The company’s internal AI wasn’t good enough, and time was running out.
When this news leaked, Apple’s AI teams panicked. Mike Rockwell, who oversees Siri, and John Giannandrea called an emergency all-hands meeting. Rockwell even called the report nonsense.
But most people didn’t believe them. Because everyone knew it was true.
So Apple went shopping. And the negotiations were messy.
Anthropic: They wanted several billion dollars annually over multiple years. Too expensive for Apple’s taste, even for a company sitting on hundreds of billions in cash.
OpenAI: They were already poaching Apple engineers and working on hardware with former Apple design legend Jony Ive. A clear conflict of interest. Plus, in May 2025, Jony Ive sold his startup IO to OpenAI for $6.5 billion, with CEO Sam Altman announcing they were working on new hardware devices. Partnering with them would mean funding a potential competitor.
Google: Initially not even in the running. They were fighting a US government antitrust lawsuit partly tied to their $20 billion-per-year search deal with Apple. But increasingly desperate times call for desperate measures.
The Google Gamble
By August 2025, Apple revisited Google’s Gemini AI and found it had improved dramatically. More importantly, Google was willing to play ball.
Apple would pay approximately $1 billion per year for a 1.2 trillion parameter AI model—far more powerful than Apple’s 150 billion parameter model.
Lucky timing helped. In September, a judge ruled Apple and Google’s search deal wouldn’t need unwinding despite antitrust concerns.
By November, the deal was done. In January 2026, they announced the partnership. Apple is calling these “Apple Foundation Models version 10” internally, but people know it’s Google’s tech.
For the fully reimagined Siri coming later, they’re discussing running it directly on Google’s cloud infrastructure—not Apple’s servers.
Apple, famous for controlling everything, may be outsourcing Siri’s brain to a competitor.
The AI Pin Strategy
Apple is reportedly developing an AI Pin—a wearable device approximately the size of an AirTag. The device would feature dual cameras, microphones, a speaker, and wireless charging capabilities. Designed to clip onto clothing, it would function as an always-on AI assistant without a screen, relying on voice and camera interactions.
This approach isn’t entirely new to the market.
Learning from Humane’s Experience
In 2024, Humane launched a similar AI Pin with considerable backing. Founded by former Apple designers, the company raised $230 million and positioned the device as a smartphone alternative.
Priced at $700 plus a monthly subscription, it featured dual cameras, voice interaction, and AI capabilities. However, the product faced significant challenges:
The device experienced overheating issues, with executives reportedly using ice packs during pre-launch demonstrations. Battery life lasted 2-4 hours. The AI assistant’s accuracy was inconsistent, and basic functions proved unreliable.
Humane projected 100,000 units in year-one sales but delivered approximately 10,000. By February 2025, HP acquired Humane’s assets for $116 million—roughly half the invested capital. The AI Pin was effectively discontinued.
The market feedback was clear: consumers weren’t interested in replacing smartphones with wearable devices offering reduced functionality at premium prices.
What’s Actually Coming
Phase 1 – February/March 2026: Apple will announce the first results of the Google partnership, likely in late February. The upgraded Siri in iOS 26.4 will finally deliver what was promised in June 2024, the ability to tap into your personal data and complete tasks.
Phase 2 – June 2026: The real transformation. Code-named “Campos,” this is a completely reimagined Siri built for the chatbot era. Conversational, context-aware, sustained dialogue—everything ChatGPT already does.
For most iPhone users: Siri might finally become useful for more than setting timers.
The Fallout Inside Apple
The Google deal represents a fundamental reset under Craig Federighi, who took control of AI after Cook lost confidence in Giannandrea.
Giannandrea was pushed out in December 2025. Apple brought in Amar Subramanya, a former Google engineer who worked on Gemini, basically announcing their strategic direction.
Projects got scaled back or paused: the World Knowledge Answers project (Apple’s ChatGPT competitor), a revamped Safari browser for AI, and standalone AI chatbots across apps.
Meanwhile, talent continues draining from Apple’s AI teams. Engineers are seemingly leaving for better pay elsewhere.
What Went Wrong?
ChatGPT’s launch in late 2022 appeared to blindside Apple executives. It looks like they realized too late that the AI revolution was already here.
Apple’s secrecy culture didn’t help. While competitors published research and attracted top talent, Apple’s notorious secrecy seems to have deterred graduate students and researchers.
The company also bet on privacy-first, on-device AI, keeping your data on your iPhone rather than in the cloud. Laudable goal, but it comes with trade-offs. The most powerful AI models require massive computing power that doesn’t fit on a phone.
And there’s the investment gap. Google, Microsoft, Meta, and Amazon committed $380 billion in 2025 capital expenditures for AI data centers. Apple spent just $12.71 billion—less than in 2018.
The CEO Succession Subplot
While this AI drama unfolded, Apple was preparing for its next era. In late 2025, Tim Cook put hardware chief John Ternus in charge of Apple’s design teams, both hardware and software.
This isn’t trivial. Design has always been at Apple’s heart. Only the most senior executives have held this role: Jony Ive, Cook himself, and now Ternus.
It’s crystal clear: Ternus is likely being groomed as Cook’s successor. Reports suggested it could happen in 2026, but that seems unlikely. Still, the pieces could be moving into place.
Does Any of This Matter?
The promised AI “super cycle” never materialised. Apple is among the worst performers in the “Magnificent Seven” tech stocks in 2025. Some analysts say Apple is one to two years behind Google in AI.
But most customers don’t care. They just want a Siri that works. And if Google’s Gemini delivers that? They’ll take it.
Nobody checks which company powers Safari’s search or makes iPhone components. They just want it to work.
The Path Forward
The bigger question: Will Apple return to building its own large-scale AI models, or stick with partners? The latter means treating AI models as a commodity—like storage—rather than a core capability.
The Siri launch in February will be the first real test. Will Google’s technology save Apple’s AI dreams, or is this just buying time?
The company that changed how we think about phones and computers is now asking a rival for help to stay relevant in AI. And sometimes, that’s what you have to do when you miss the boat on the biggest technology shift in a generation.
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