Alphabet sidesteps investor questions on Google Apple AI deal worth $1 billion annually

Alphabet won't talk about the Google-Apple AI deal, even to investors | TechCrunch

Alphabet declined to answer one of its investors buring questions about Google's AI deal with Apple on Wednesday's fourth-quarter earnings call. Instead of responding to an analyst's question about how the tech giant is thinking about AI partnerships, such as the one with Apple to power AI for Siri, the question was completely ignored. That decision tells us something, though -- Alphabet isn't ready to talk about how this partnership will impact its core business, which is increasingly focused on AI. Over the years, the Google-Apple relationship has been mutually beneficial. The two companies' search partnership saw the search giant paying the iPhone maker $20 billion to be the default search engine on Apple devices, filings from the Department of Justice's lawsuit against the search giant had revealed. In turn, Google gained access to Apple's massive customer base -- the iPhone maker last quarter announced it has 2.5 billion active devices worldwide to give you an idea of scale. The latest Apple AI deal is rumored to cost Apple roughly $1 billion per year, but the payoff beyond that for Google isn't as immediately obvious as it is with search. In Google Search, consumers see links to advertisers' websites at the top of their search results. Ads in AI Mode, which could one day represent the future of Google's search business, are still an "experiment" for now. The company first announced last May that it would bring ads to AI Mode, the chatbot-style interface for Google Search, but these tests see the ads' placement below or integrated into the chatbot's responses. Google is also trying out agentic shopping, including Shop with AI Mode, to guide consumers with product-related queries to a seamless checkout experience from the AI interface. Meanwhile, Google's AI competitor Anthropic is taking aim at ad-supported AI with its forthcoming Super Bowl ad, which challenges the business model being adopted by ChatGPT maker OpenAI and Google. How this will all play out longer-term is still an open question -- and for today, an unanswered one, apparently. Overall, the Apple Siri deal barely received any mention during Alphabet's earnings on Wednesday. Pichai only noted he was pleased that Apple's "preferred cloud provider" and would be helping to develop "the next generation of Apple foundation models based on Gemini technology." Google's Chief Business Officer, Philipp Schindler, used the exact same wording when mentioning Apple, as well.

Alphabet stays silent on details of Apple AI partnership during earnings call

Alphabet declined to answer an investor's question about its AI partnership with Apple during its fourth-quarter earnings call on Wednesday. The query focused on Google's approach to AI partnerships, including the deal to power Siri, but company executives ignored it completely. The earnings call featured minimal discussion of the Google-Apple AI arrangement. CEO Sundar Pichai stated he was pleased that Google serves as Apple's preferred cloud provider and is assisting in developing the next generation of Apple foundation models based on Gemini technology. Chief Business Officer Philipp Schindler repeated the same phrasing when referencing Apple. This AI deal follows a longstanding search partnership between the two companies. Filings from the Department of Justice's lawsuit against Google revealed that Google pays Apple $20 billion annually to remain the default search engine on Apple devices. This arrangement grants Google access to Apple's customer base, which includes 2.5 billion active devices worldwide as announced by Apple in the previous quarter. The new AI agreement differs in structure from the search deal. Reports indicate it costs Apple roughly $1 billion per year. Unlike the search partnership, where benefits to Google appear straightforward through user traffic, the advantages from this AI collaboration remain less clear at present. Google continues to evolve its search product amid AI developments. Traditional Google Search displays links to advertisers' websites at the top of results pages. In May, Google announced plans to introduce advertisements into AI Mode, the chatbot-style interface within Google Search. Current tests position these ads below the chatbot's responses or integrate them directly into the output. These ad placements in AI Mode remain at an experimental stage. Google first detailed the initiative last May, specifying that ads would appear below or within the AI-generated responses to user queries. This approach aims to incorporate monetization into conversational search experiences. Google is also testing agentic shopping features. Shop with AI Mode represents one such capability, designed to assist users with product-related queries. It directs them through a process leading to checkout directly from the AI interface, creating a seamless path from inquiry to purchase. Meanwhile, Google's AI rival Anthropic plans to launch a Super Bowl advertisement. This ad targets the ad-supported AI business model pursued by OpenAI, maker of ChatGPT, and Google itself. The Apple Siri deal received scant attention overall during Alphabet's earnings call on Wednesday. Executives provided no further details on its potential effects on Google's operations.

Alphabet dodges investor question on Google-Apple AI deal during earnings call

Google and Apple already share a Rs-scale multibillion-dollar search deal, but the AI partnership lacks a clear monetisation model. Google parent company Alphabet's latest earning call offered a rare moment of silence on one of the biggest AI partnerships in the tech industry. During the company's fourth-quarter investor call on Wednesday, executives skipped over a direct question about Google's reported AI collaboration with Apple. An analyst had asked how Google is thinking about AI partnership, specifically in reference to Apple's plans to use Google's AI technology to enhance Siri. It was not answered, standing out in the call otherwise focused heavily on artificial intelligence and long-term growth. While the company did not address the statement, the choice of not answering itself showed how sensitive the topic is. For the unversed, Google and Apple have been sharing a financial relationship for years. Recent court filings in the US Department of Justice's antitrust case against Google have shown that the search giant pays Apple around $20 billion annually to remain the default search engine on iPhones and other Apple devices. In return, the company gets access to one of the world's largest consumer ecosystems, with Apple reporting a global installed base of 2.5 billion active devices last quarter. Also read: What is BGMI Career Mode and can it help you land your dream job? The new AI focused partnership, however, appears to be complicated. Industry reports suggest Apple may be paying roughly $1 billion a year to tap Google's AI capabilities to power future Siri. Unlike search, where advertising revenue is immediate and well established, AI-driven interfaces do not yet offer a clear or proven monetisation path. Even after investor interest, the Apple partnership received only brief and carefully worded mentions during the earnings call. CEO Sundar Pichai said Google was pleased to be Apple's preferred cloud partner and noted ongoing work on next-generation Apple foundation models built on Gemini technology. Even Alphabet's chief business officer said the same thing. For now, how Google's AI collaboration with Apple will translate into revenue or strategic advantage remains unclear.