Apple Just Paid Google $1B a Year to Run Siri's Brain.

Short summary

Apple is paying Google ~$1B/year for a custom Gemini model to power rebuilt Siri after years of failed in-house development. While this looks like humiliation, Apple's ecosystem lock-in (2.5B devices, 89% loyalty, $100B/year services revenue) means poor Siri can't drive users away. The deeper insight: model quality is a depreciating commodity asset; Apple is right to rent rather than own the LLM and invest in the ecosystem that compounds.

• •Apple contracted Google's Gemini (~$1B/year) to rescue Siri after multi-year internal failures and false-advertising fallout
• •Ecosystem lock-in (2.5B active devices, 89% iPhone loyalty, embedded services) shields Apple from switching despite poor assistant quality
• •Model quality is commodity input; renting is rational capital allocation vs. spending billions on a depreciating asset

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