Alphabet declined to answer one of its investors’ questions about Google’s artificial intelligence deal with Apple on Wednesday’s fourth-quarter earnings call. Instead of answering an analyst’s question about how the tech giant thinks about AI partnerships, such as the one with Apple to power the AI for Siri, the question was completely ignored.
However, this decision tells us something – Alphabet is not ready to talk about how this partnership will affect its core business, which is increasingly focused on artificial intelligence.
Over the years, the Google-Apple relationship has been mutually beneficial. The two companies’ search partnership led to the search giant paying the iPhone maker $20 billion to be the default search engine on Apple devices, filings from 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 was announced it has 2.5 billion active devices worldwide to give you an idea of the scale.
The latest Apple AI deal is it is rumored to cost Apple around $1 billion annuallybut the payoff beyond that for Google is not as immediately obvious as with search. On Google Search, consumers see links to advertiser websites at the top of their search results. AI-powered ads, 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 its AI mode, its chatbot-like interface for Google Search, but these tests see ads placed below or embedded in the chatbot’s responses. Google is also testing agentive shopping, including Shop with AI Mode, to guide consumers with product inquiries through a seamless checkout experience from the AI interface.
Meanwhile, Google’s AI rival Anthropic is aiming for ad-supported AI with the upcoming Super Bowl ad, which challenges the business model adopted by ChatGPT developer OpenAI and Google.
How this will all play out in the long run remains an open question — and for now, unanswered, apparently.
Overall, the Apple Siri deal received almost no mention during Alphabet’s earnings call on Wednesday. Pichai only noted that he was pleased to be Apple’s “preferred cloud provider” and would help develop “the next generation of Apple foundational models based on Gemini technology.” Google’s Chief Business Officer, Philipp Schindler, used the exact same wording when he mentioned Apple.
