Alphabet sidesteps investor questions on Apple AI deal

Alphabet declined to address investor questions regarding its AI partnership with Apple during Wednesday’s fourth-quarter earnings call. Instead of responding to an investor question about how the company is thinking about AI partnerships, the query was completely ignored. The decision to sidestep the topic signals a reluctance to disclose how the partnership will impact Alphabet’s core business, which is increasingly focused on artificial intelligence.

This silence stands in contrast to the established search partnership between the two companies. Filings from the Department of Justice’s lawsuit against the search giant revealed that Google paid Apple $20 billion to secure default search engine status. In turn, Google gained access to Apple’s massive customer base, which includes 2.5 billion active devices worldwide. While the search arrangement provided a clear revenue model, the financial payoff of the new AI deal is less obvious. The new AI partnership is rumored to cost Apple roughly $1 billion per year, but its long-term financial return remains unclear.

The uncertainty comes as Google continues to experiment with how to monetize AI-driven interfaces. In traditional Google Search, consumers see links to advertisers’ websites at the top of their search results. By contrast, ads in AI Mode—the chatbot-style interface for Google Search—are still an experiment. Google first announced last May that it would bring ads to AI Mode, testing placements below or integrated directly into the chatbot’s responses. The company is also testing agentic shopping, which refers to AI-driven shopping assistance, to guide consumers with product-related queries to a seamless checkout experience. These experiments are unfolding as competitors like Anthropic and OpenAI challenge the ad-supported AI business model.

During the earnings call, Alphabet executives offered very few details about the arrangement. Sundar Pichai limited his comments to noting that Google is Apple’s “preferred cloud provider” and will help develop “the next generation of Apple foundation models based on Gemini technology.” Google’s Chief Business Officer Philipp Schindler used the exact same phrasing when mentioning the Apple partnership, leaving investors without further clarity.

Why it matters

Alphabet’s refusal to discuss the Apple AI partnership during its earnings call suggests the company is not yet ready to disclose how this partnership will impact its core business, which is increasingly focused on AI.