Cathie Wood's ARK Invest Says Apple's Reliance On Google For AI Signals Deeper Trouble

Apple Inc.‘s (NASDAQ:AAPL) decision to outsource its artificial intelligence (AI) foundation to Alphabet Inc.‘s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google is not a strategic masterstroke but a sign of a company in “huge, hairy trouble,” according to the research team at Cathie Wood‘s ARK Invest.

‘Strategic Disaster’

During the latest episode of ARK’s “The Brainstorm,” Chief Futurist Brett Winton offered a scathing critique of the newly announced partnership that will see Google’s Gemini models power Siri.

Winton characterized the iPhone maker as “floundering,” arguing that the deal highlights Apple’s inability to compete in the AI arms race.

“I think Apple’s in huge, hairy trouble,” Winton said. He pointed to a stark reversal in the economic dynamic between the two tech giants.

While Google previously paid Apple an estimated $20 billion annually to be the default search engine on iOS, the new dynamic requires Apple to pay for intelligence.

“Apple… is having to turn around and repeatedly pay Google somewhere around a billion dollars a year,” Winton noted. “So they’re net losing $21 billion a year on people trying to find information through their system.”

Loss Of Taste And Innovation

The critique extended beyond financials to Apple’s product culture. Winton argued that the company has “lost its ability to curate” and lacks the internal talent to build a frontier foundation model.

He dismissed the idea that simply paying Google would solve Apple’s product issues, citing the lackluster reception of current “Apple Intelligence” features.

Winton noted that users, including his own family members, are disabling the features because they accidentally trigger unwanted actions.

The ‘Devil You Know’

Nick Grous, ARK’s Director of Research for Consumer Internet, offered a slightly more pragmatic view on the tie-up. He suggested the deal is likely a defensive move by two tech monopolies trying to lock out new entrants like OpenAI.

“This is the devil you know versus the devil you don’t know,” Grous explained. He argued that Apple prefers maintaining its long-standing “duopoly” relationship with Google rather than empowering a disruptor.

However, the ARK team ultimately agreed that while the deal might save Apple from immediate obsolescence, it signals that the company is no longer an innovation leader in its own right.

Apple Lags In 2026 So Far

Shares of Apple have dropped by 4.38% in 2026 so far. However, they were 24.61% higher over the last six months and 11.44% higher over the past year.

It maintains a stronger price trend over the medium and long terms but a weak trend in the short term, with a solid quality ranking, as per Benzinga’s Edge Stock Rankings.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: Shutterstock