It makes no sense at all. Google offers free but limited Gemini in exchange for being able to train their models on user data.

They are also gradually introducing advertising to Gemini and they can upsell and cross sell their paid plans (Gemini, Google One, Youtube, Workspace) to a large pool of users across all their apps, platforms and integrations.

They can do none of that with the white label models they to rent to Apple. That's why Apple will always have to pay for it directly.

This is very different from the search deal Apple has with Google. Under that deal, Apple sends users straight to Google along with all the advertising revenue it brings. Google returns some of that revenue to Apple.