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.
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