Alphabet reports fourth-quarter earnings Wednesday, and analysts want specifics on the Apple partnership announced in January. The deal positions Google's Gemini as the AI engine for Siri's complex tasks starting this fall, with a phased rollout through 2026.
The scale matters: 2.5 billion active Apple devices. Bloomberg reported the deal at $1 billion annually, though neither company has confirmed terms. What's unclear is data access, revenue splits, and whether Google sees query patterns that could train its models.
"They'll have critical mass, and even if they're not going to get consumer information, maybe they'll be able to see what queries are being asked," said Gil Luria, managing director at D.A. Davidson.
Apple CEO Tim Cook told CNBC the Gemini-powered Siri will be personalized but won't access Gmail or other Google services. That's the party line. The engineering reality of routing complex queries to Google's infrastructure while maintaining Apple's privacy framework remains unexplained.
This marks Apple's second major AI partnership after integrating ChatGPT into iOS 18. The company appears to be building what analysts call a "pluralistic" AI ecosystem rather than committing to a single vendor. That's sensible given how fast the space moves, but it creates integration complexity and potentially confusing user experiences.
For Google, the win is defensive. Apple choosing Gemini over OpenAI or Claude validates Google's enterprise AI credibility beyond search. The existing search deal pays Google an estimated $20 billion annually for default placement. This AI arrangement follows the same playbook: pay for distribution, defend the relationship.
Three things to watch in Wednesday's call: whether Google can monetize this beyond the flat partnership fee, what happens to the OpenAI relationship, and timeline details for the fall rollout. Apple said the full Siri overhaul arrives with iPhone 18 in Fall 2026.
The partnership requires separate arrangements for China, where Google services face restrictions. Apple is reportedly working with Alibaba for that market.
Wall Street expects 15% year-over-year revenue growth for Q4, but the Siri deal implications matter more long-term. If Google successfully powers AI across Apple's installed base, it cements Alphabet as infrastructure for the AI economy regardless of which model wins consumer mindshare.