During Alphabet’s fourth-quarter earnings call on Wednesday, the company declined to answer an investor’s question about its AI partnership with Apple. The question, which asked how Google thinks about such AI deals, was completely ignored. This decision signals that Alphabet is not yet ready to discuss how this partnership will impact its core business, which is increasingly centered on artificial intelligence.
The relationship between Google and Apple has long been mutually beneficial. Their existing search partnership has involved Google paying Apple an estimated $20 billion to be the default search engine on Apple devices, as revealed in Department of Justice filings. In return, Google gains access to Apple’s massive customer base, which includes 2.5 billion active devices worldwide.
The new AI deal, rumored to cost Apple around $1 billion per year, presents a different dynamic. The immediate payoff for Google is less obvious than with search. In traditional Google Search, ads appear prominently at the top of results. However, ads in AI Mode, the chatbot-style search interface, are still an experiment. These ads are placed below or integrated into the AI’s responses.
Google first announced it would bring ads to AI Mode last May. The company is also testing agentic shopping features, like Shop with AI Mode, designed to guide users from product queries to a seamless checkout experience directly within the AI interface.
Meanwhile, Google’s AI competitor Anthropic is challenging the ad-supported AI model. The company plans a Super Bowl ad that takes aim at the business approaches of OpenAI and Google.
How this will evolve long-term remains an open question, and for now, it is also an unanswered one from Alphabet’s leadership. The Apple Siri deal received minimal mention during the earnings call. CEO Sundar Pichai only noted he was pleased that Google is Apple’s preferred cloud provider and would help develop the next generation of Apple foundation models based on Gemini technology. Chief Business Officer Philipp Schindler used the exact same wording when referencing Apple.