In Google earnings, analysts want answers on Apple's Siri-Gemini deal

As Alphabet prepares to announce its latest earnings, all eyes are on the company's strategic partnership with Apple aimed at transforming the Siri virtual assistant through Google's Gemini artificial intelligence technology. Analysts expect Google to report a robust 15% increase in year-over-year revenue for the fourth quarter, but they anticipate that the earnings call will primarily focus on the implications of the Siri-Gemini collaboration. This earnings call marks the first time Alphabet's leadership will address shareholders since Apple revealed in January that it had selected Gemini as the foundation for an overhaul of Siri. The partnership is significant, given Apple's vast user base of 2.5 billion active devices, which could provide valuable insights for Google, even without direct access to user data. Gil Luria, a managing director at D.A. Davidson, highlighted that while Google may not receive consumer information directly, it could still analyze query trends to enhance its AI models. Details about the partnership remain sparse, but both companies have confirmed that this multiyear collaboration will utilize Google's Gemini and cloud technologies for future foundational models at Apple. In a joint announcement, Apple expressed confidence that Google's AI technology would serve as a strong basis for their foundational models, promising innovative experiences for users. Apple's Intelligence suite, which encompasses Siri and other AI tools, will continue to operate on Apple devices and within the company's private cloud infrastructure. CEO Tim Cook spoke about the partnership during a recent earnings report, noting that the updated Siri would offer personalized experiences while maintaining user privacy—stating, "It won't know users' Gmail and stuff like that." While specific financial details of the partnership are yet to be confirmed, reports suggest Apple may pay Google around $1 billion annually. This collaboration is not the first between the two tech giants; Google has served as the default search engine on Apple devices since the advent of the iPhone, for which it reportedly pays Apple approximately $20 billion each year. The integration of Google’s AI infrastructure into Apple's services marks a notable shift in Apple's approach, traditionally relying on its own encrypted cloud. Analysts speculate that this could also enhance Google's access to user data, which would be advantageous for their AI initiatives. Cook emphasized the importance of integrating intelligence throughout Apple's operating system in a manner that prioritizes user privacy. If Apple fully adopts Google's computing infrastructure for its AI functions, it would be a significant boost for Google, reinforcing its dominance in AI and cloud computing. The choice of Google over competitors like OpenAI for this partnership signifies a strategic advantage for the search giant. While Apple maintains a relationship with OpenAI for integrating ChatGPT into Siri, the implications of the new Google partnership on this arrangement remain unclear. Concerns had been raised about Apple potentially favoring OpenAI, but this collaboration with Google appears to quell those worries, ushering in a new era of AI capabilities for Siri and beyond.