A shocking silence from Alphabet has left investors and tech enthusiasts alike wondering about the future of AI partnerships. In a bold move, Alphabet chose not to address a critical question about its AI deal with Apple during the recent earnings call, leaving many to speculate on the reasons behind this strategic silence.
The Google-Apple relationship has been a fascinating dance over the years, with both companies benefiting from their search partnership. Google, the search giant, paid Apple, the iPhone maker, a whopping $20 billion to be the default search engine on Apple devices. In return, Google gained access to Apple's massive customer base, which now stands at an impressive 2.5 billion active devices worldwide.
But here's where it gets controversial... The latest Apple AI deal, rumored to cost Apple a significant $1 billion per year, raises questions about the potential impact on Google's core business, which is increasingly AI-focused. While the search giant has gained access to Apple's vast customer base, the payoff in terms of AI partnerships is less clear.
In Google Search, consumers are familiar with seeing ads at the top of their search results, but in AI Mode, the future of Google's search business, ads are still an experiment. Google is testing the waters with integrated ads within chatbot responses and exploring agentic shopping experiences, aiming to guide consumers seamlessly from product queries to checkout.
Meanwhile, Google's AI competitor, Anthropic, is taking a bold stance against ad-supported AI with its upcoming Super Bowl ad, challenging the business models of ChatGPT maker OpenAI and Google.
The long-term implications of these moves are still uncertain, leaving us with more questions than answers. Why did Alphabet choose to remain silent on this matter? What does this mean for the future of AI partnerships and the tech industry as a whole?
During Alphabet's earnings call, the Apple Siri deal was barely mentioned. Sundar Pichai expressed his pleasure at being Apple's "preferred cloud provider" and helping develop the next generation of Apple foundation models based on Gemini technology. Philipp Schindler, Google's Chief Business Officer, used similar wording when referring to Apple.
This story was reported by Sarah, a seasoned reporter for TechCrunch since 2011. Prior to her journalism career, Sarah worked in IT across various industries. You can reach out to Sarah via email at sarahp@techcrunch.com or through encrypted messaging on Signal at sarahperez.01.
