Headline: Alphabet's Silence on Apple AI Deal Says Everything
Sundar Pichai just skipped an analyst's question about Apple on Alphabet's Q4 earnings call. Not deflected. Not vaguely addressed. Completely ignored.
The question was straightforward: how is Alphabet thinking about AI partnerships like the one powering Siri with Gemini? On a call where Pichai was otherwise happy to celebrate $113.8 billion in quarterly revenue and 750 million Gemini monthly active users, this particular topic got the silent treatment.
That's the most interesting thing Alphabet said all night.
The Numbers Are Great. The Strategy Is Blurry.
On paper, Alphabet's quarter was excellent. Revenue hit $113.8 billion, up 18% year over year. Annual revenue crossed $400 billion for the first time. Net income came in at $34.46 billion, a 30% jump. Google Cloud alone pulled $17.66 billion, putting it on a $70 billion annual run rate. Pichai called it "a tremendous quarter."
The AI numbers are genuinely impressive. Gemini now counts over 750 million monthly active users and processes more than 10 billion tokens per minute through direct API use. Those are real scale numbers, not demo-day vanity metrics.
But the company also announced 2026 capital expenditure guidance of $175 billion to $185 billion. That's nearly double its 2025 spending and roughly $60 billion more than what Wall Street had modeled. Alphabet is making one of the largest infrastructure bets in corporate history on AI compute capacity. The stated reasons: Google DeepMind research and "significant cloud customer demand."
Which brings us back to Apple.
The Deal That Doesn't Fit the Narrative
The Google-Apple relationship has always been transactional and slightly awkward. Google reportedly paid $20 billion to be the default search engine on Apple devices, a deal that made perfect sense: Apple got a massive check, Google got access to 2.5 billion active devices. Everyone's incentives aligned.
The AI deal is different. Bloomberg has reported it costs Apple roughly $1 billion per year. But what does Google get? With search, the answer was obvious: eyeballs on ads. With AI, the monetization path is far murkier. Google's ads in AI Mode are still an "experiment," according to TechCrunch's reporting. The company announced last May that it would bring ads to its chatbot-style search interface, but it's been testing cautiously, with ads placed below or woven into chatbot responses.
So Google is spending billions building AI infrastructure, then licensing its best models to power a competitor's assistant on devices where Google's own AI monetization strategy is still unproven. You can see why Pichai might not want to explain that logic to investors in real time.
Our read: the silence points in two directions, neither flattering. Either the deal's economics are unfavorable enough that explaining them publicly would undercut Alphabet's AI monetization narrative, or the partnership itself is fragile enough that neither side wants to draw attention to it. Possibly both.
The Competitive Squeeze
The Apple deal doesn't exist in a vacuum. Anthropic is about to air a Super Bowl ad that takes direct aim at ad-supported AI, challenging the business model that both Google and OpenAI are building around. That's a pointed message to the exact consumer base Google is trying to monetize through AI Mode.
Meanwhile, Pichai offered only the blandest possible framing of the Apple relationship on the call. He said he was pleased that Apple chose Google as its "preferred cloud provider" and that Google would help develop "the next generation of Apple foundation models based on Gemini technology." Chief Business Officer Philipp Schindler used the exact same wording. That kind of identical, rehearsed language is what companies use when they've been told exactly how far they can go, and not one word further.
What Does the $185 Billion Bet Mean?
The $175-$185 billion capex commitment means Alphabet is all-in on AI infrastructure regardless of whether the monetization story is clean. That's a bet that scale wins, and that the revenue models will follow the users. With 750 million Gemini MAUs, there's reason to believe that bet could pay off.
But investors deserve to know how the Apple deal fits into that picture. Is Google subsidizing a competitor's AI capabilities to maintain distribution, the way it subsidized Apple's search default? Or is this something else entirely?
Pichai's refusal to answer suggests the honest answer isn't one Alphabet is ready to give.