Alphabet declined to respond to any of its investors when asked about Google’s AI deal with Apple during Wednesday’s fourth-quarter earnings conference call. Instead of answering an analyst’s question about how the tech giant views AI partnerships, like the one with Apple to power Siri’s AI, the question was completely ignored.
This decision, however, tells us something: Alphabet is not ready to talk about the impact of this partnership on its core business, which is increasingly focused on AI.
Over the years, the Google-Apple relationship has been mutually beneficial. The search partnership between the two companies allowed the search giant to pay the iPhone maker. 20 billion dollars be the default search engine on Apple devices, deposits of the Justice Department’s lawsuit against the search giant revealed. In turn, Google gained access to the huge customer base of Apple, the iPhone maker, last quarter. announcement it has 2.5 billion active devices worldwide, to give you an idea of the scale.
The latest Apple AI deal is rumored to cost Apple around $1 billion per yearbut the benefits beyond that for Google aren’t as immediately obvious as they are for search. In Google Search, consumers see links to advertisers’ websites at the top of their search results. AI ads, which could one day represent the future of Google’s search business, are still an “experiment” for now.
Business first announcement last May it would bring ads into AI Mode, the chatbot-style interface for Google Search, but these tests see ad placement underneath or embedded within the chatbot’s responses. Google is also trying purchasing agents, including Shop with AI Fashionto guide consumers with product-related queries to a seamless payment experience from the AI interface.
Meanwhile, Google’s AI competitor Anthropic is targeting ad-supported AI with its next Super Bowl ad, which calls into question the business model adopted by ChatGPT maker OpenAI and Google.
How this will all play out in the long term remains an open question – and for now, seemingly unanswered.
Overall, the Apple Siri deal was barely mentioned during Alphabet’s earnings call on Wednesday. Sundar Pichai said only that he was excited to be Apple’s “preferred cloud provider” and would help develop “the next generation of Apple core models based on Gemini technology.” Philipp Schindler, Google’s chief commercial officer, also used the exact same wording when mentioning Apple.
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