Alphabet won’t talk about the Google-Apple AI deal, even to investors

During its recent fourth-quarter earnings call, Alphabet chose not to address a pressing inquiry from investors regarding its AI collaboration with Apple. An analyst's question about the implications of this partnership, particularly how it might influence Google's AI strategy and its relationship with Siri, went unanswered. This silence suggests that Alphabet may not yet be prepared to discuss the potential impact of this deal on its core business, which is increasingly leaning into artificial intelligence. The collaboration between Google and Apple has historically been advantageous for both parties. For instance, reports from the Department of Justice indicated that Google has paid Apple approximately $20 billion to remain the default search engine on Apple devices. This arrangement has allowed Google access to Apple's vast user base, which recently announced it has 2.5 billion active devices worldwide. The latest AI partnership is speculated to cost Apple around $1 billion annually, but the benefits for Google are less clear compared to the straightforward advantages seen in search advertising. Currently, Google's AI Mode, which integrates ads into the chatbot-style interface of Google Search, is still in experimental stages. The company previously announced plans to incorporate advertisements into this new format, but the placement of these ads remains a work in progress. Additionally, Google is exploring agentic shopping through its AI Mode, which aims to enhance the shopping experience by guiding users to a more fluid checkout process directly from AI interactions. Meanwhile, Google faces competition from Anthropic, which is preparing to challenge ad-supported AI models through a Super Bowl advertisement that critiques the business strategies employed by both OpenAI and Google. As for the implications of the Apple Siri deal, there was minimal discussion during the earnings call. CEO Sundar Pichai did express satisfaction with Apple being a "preferred cloud provider" and mentioned ongoing efforts to develop advanced foundation models based on Gemini technology. Google’s Chief Business Officer echoed this sentiment, reinforcing the collaborative nature of the relationship without delving into specifics about the AI deal.