Apple Pulls Back Premarket After Google-Fueled Rally: Buzz Of AI Web Search Tool Heats Up

A report that shed more details on Apple Inc.'s (AAPL) improved Siri launch, equipped with new artificial intelligence (AI) search capabilities, did not provide further momentum to the stock. In Thursday's early premarket session, Apple stock was down marginally. 

It jumped 3.81% to $238.47 on Wednesday over potential benefits from the Google antitrust ruling.

On Stocktwits, retail sentiment toward Apple has improved to 'neutral' (44/100) by early Thursday, from 'bearish' a day ago. The message volume increases, although only to 'normal' levels. 

According to Bloomberg's Mark Gurman, Apple's upcoming feature incorporated into Siri will likely give AI startups such as OpenAI and Perplexity a run for their money.

Apple has an ongoing partnership with OpenAI, led by its co-founder Sam Altman, to integrate the latter's ChatGPT large-language model (LLM) across its hardware products. Additionally, rumors of Apple potentially acquiring Perplexity circulated in recent months as the tech giant bridges its AI gap with its mega-cap tech peers.

The  Bloomberg report, citing people familiar with the matter, said Apple is working on a system, internally dubbed World Knowledge Answers, that is meant to be integrated into Siri. The company is also eyeing to use the same technology in its Safari web browser and Spotlight search. 

The rationale is to evolve Siri and Apple's operating systems, providing a place for users to search the web and access the required information, similar to OpenAI's ChatGPT, Google's AI Overviews and a host of apps from other providers. 

Apple is targeting a Spring release timeline for the much-awaited improved Siri launch. 

Gurman said the Tim Cook-led company could source the underlying technology for the new Siri from Google. Apple reportedly signed a formal agreement with Google to evaluate and test a Google-developed AI model to power Siri. 

Following a federal court's ruling that allowed Google to strike partnerships with companies for Google services, analysts and market participants suggested that Apple could announce a new Google Gemini AI partnership. 

Apple plans to provide an interface that uses text, photos, video and local points of interest through the new search experience and an AI-powered summarization. It is also developing a planner that can interpret voice or text inputs and decide how to respond. For the planner, Apple is evaluating the use of Google in addition to Anthropic PBC's Claude or in-house models.

For now, Apple plans to use in-house foundational models for searching user data that will help preserve user privacy. 

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