Alphabet Stays Mum on Google’s AI Deal with Apple During Earnings Call
Alphabet chose to remain tight-lipped when one of its investors inquired about Google’s AI partnership with Apple on Wednesday’s fourth-quarter earnings call. The company opted not to address the analyst’s question regarding its strategy for AI collaborations, particularly the one with Apple to enhance Siri’s AI capabilities.
This silence speaks volumes about Alphabet’s stance on discussing the potential impact of this partnership on its core business, which is increasingly centered around AI technology.
Historically, the relationship between Google and Apple has been mutually beneficial. The search partnership between the two tech giants involved Google paying Apple a substantial amount to secure its position as the default search engine on Apple devices. This partnership granted Google access to Apple’s extensive customer base, as Apple recently reported having 2.5 billion active devices worldwide.
While rumors suggest that Apple’s latest AI deal with Google could cost around $1 billion annually, the immediate benefits for Google are not as clear-cut as with the search partnership. In Google Search, sponsored links appear prominently in search results, generating revenue for the company. However, in AI Mode, where ads are still experimental, the monetization strategy is evolving.
In a bid to explore new revenue streams, Google introduced ads to AI Mode last year, with a focus on integrating ads subtly within the chatbot interface. Additionally, Google is experimenting with agentic shopping features, such as Shop with AI Mode, to enhance the shopping experience for users interacting with AI-powered search.
Meanwhile, Anthropic, a competitor in the AI space, is challenging the ad-supported AI model embraced by OpenAI and Google. The company’s upcoming Super Bowl ad aims to disrupt the current business model prevalent in the AI industry.
Despite the evolving landscape of AI and advertising, Alphabet chose not to delve into the intricacies of its Apple Siri partnership during the recent earnings call. Both Sundar Pichai and Philipp Schindler briefly acknowledged the collaboration, highlighting Apple as their “preferred cloud provider” and emphasizing the development of next-generation AI models based on Gemini technology.
As the future of AI partnerships and monetization strategies unfolds, Alphabet’s cautious approach to discussing the Apple deal underscores the complexity and uncertainty surrounding the evolving AI landscape.
