Why Google isn't talking about AI partnership with Apple
What's the story
Alphabet, the parent company of Google, has chosen not to comment on its AI partnership with Apple during Wednesday's fourth-quarter earnings call. The decision came after an analyst asked about Google's approach toward AI collaborations, including one with Apple for Siri. This silence suggests that Alphabet may not be ready to discuss how this partnership could impact its core business, which is increasingly focused on artificial intelligence (AI).
Partnership dynamics
A 2-way street
The relationship between Google and Apple has always been a two-way street. The two companies have had a search deal where Google pays Apple $20 billion to be the default search engine on its devices. In exchange, Google gets access to Apple's huge customer base. Last quarter, Apple revealed it has 2.5 billion active devices worldwide, highlighting the scale of this partnership.
AI collaboration
The AI deal
The latest deal between Google and Apple involves the latter's AI for Siri, which is said to cost Apple around $1 billion per year. However, the benefits for Google are not as clear-cut as they are with search. In fact, ads in AI Mode, potentially the future of Google's search business, are still an "experiment."
Ad experimentation
Ads in AI mode
Google had announced last May that it would introduce ads in AI Mode, a chatbot-like interface for Google Search. The tests see the ads' placement below or integrated into the chatbot's responses. The company is also testing agentic shopping with Shop with AI Mode to take consumers with product-related queries to a seamless checkout experience from the AI interface.
Market competition
Anthropic's dig at ad-supported AI
Meanwhile, Google's AI competitor Anthropic is taking a dig at ad-supported AI with its Super Bowl ad. The move directly challenges the business model being adopted by ChatGPT maker OpenAI and Google. However, the long-term impact of these developments remains uncertain, an unanswered question even during Alphabet's earnings call on Wednesday.
Earnings call highlights
What Alphabet said during the earnings call
During Alphabet's earnings call on Wednesday, the Apple Siri deal was hardly mentioned. Sundar Pichai, CEO of Google and Alphabet, only said he was happy that Apple had chosen them as its "preferred cloud provider" to help build "the next generation of Apple foundation models based on Gemini technology." Google's Chief Business Officer Philipp Schindler used the same wording while mentioning Apple too.