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Apple’s $20B Google deal under threat as AI lags behind rivals

Apple is set to release Q3 earnings on Thursday amid scrutiny over its Google search deal dependencies and ongoing struggles with AI progress.

Typically, Apple’s fiscal Q3 garners less investor attention, with anticipation focused instead on the upcoming iPhone launch in Q4. However, this quarter is proving to be anything but ordinary.

Analysts and shareholders alike are increasingly concerned about two looming threats: a potential $20 billion hit to Apple’s Services revenue tied to the US Department of Justice’s (DOJ) antitrust case against Google, and ongoing delays in Apple’s AI efforts.

Ahead of the earnings report, Apple shares were mostly unchanged, reflecting investor caution rather than enthusiasm. Apple’s most pressing challenge stems from its lucrative partnership with Google.

In 2022, Google paid Apple approximately $20 billion to remain the default search engine in the Safari browser and across Siri.

The exclusivity deal has formed a significant portion of Apple’s Services segment, which generated $78.1 billion in revenue that year, making Google’s contribution alone account for more than 25% of that figure.

However, a ruling expected next month from Judge Amit Mehta in the US District Court for the District of Columbia could threaten the entire arrangement. Mehta previously found Google guilty of operating an illegal monopoly in the search market.

The forthcoming ‘remedies’ ruling could force Google to end exclusive search deals, divest its Chrome browser, and provide data access to rivals. Should the DOJ’s proposed remedies stand and Google fails to overturn the ruling, Apple could lose a critical source of Services revenue.

According to Morgan Stanley’s Erik Woodring, Apple could see a 12% decline in its full-year 2027 earnings per share (EPS) if it pivots to less lucrative partnerships with alternative search engines.

The user experience may also deteriorate if customers can no longer set Google as their default option. A more radical scenario, Apple launching its search engine, could dent its 2024 EPS by as much as 20%, though analysts believe this outcome is the least likely.

Alongside regulatory threats, Apple is also facing growing doubts about its ability to compete in AI. Apple has not yet set a clear timeline for releasing an upgraded version of Siri, while rivals accelerate AI hiring and unveil new capabilities.

Bank of America analyst Wamsi Mohan noted this week that persistent delays undermine confidence in Apple’s ability to deliver innovation at the pace. ‘Apple’s ability to drive future growth depends on delivering new capabilities and products on time,’ he wrote to investors.

‘If deadlines keep slipping, that potentially delays revenue opportunities and gives competitors a larger window to attract customers.’

While Apple has teased upcoming AI features for future software updates, the lack of a commercial rollout or product roadmap has made investors uneasy, particularly as rivals like Microsoft, Google, and OpenAI continue to set the AI agenda.

Although Apple’s stock remained stable before Thursday’s earnings release, any indication of slowing services growth or missed AI milestones could shake investor confidence.

Analysts will be watching closely for commentary from CEO Tim Cook on how Apple plans to navigate regulatory risks and revive momentum in emerging technologies.

The company’s current crossroads is pivotal for the tech sector more broadly. Regulators are intensifying scrutiny on platform dominance, and AI innovation is fast becoming the new battleground for long-term growth.

As Apple attempts to defend its business model and rekindle its innovation edge, Thursday’s earnings update could serve as a bellwether for its direction in the post-iPhone era.

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Google states it has not received UK request to weaken encryption

Google has confirmed it has not received a request from the UK government to create a backdoor in its encrypted services. The clarification comes amid ongoing scrutiny of surveillance legislation and its implications for tech companies offering end-to-end encrypted services.

Reports indicate that the UK government may be reconsidering an earlier request for Apple to enable access to user data through a technical backdoor, which is a move that prompted strong opposition from the US government. In response to these developments, US Senator Ron Wyden has sought to clarify whether similar requests were made to other major technology companies.

While Google initially declined to respond to inquiries from Senator Wyden’s office, the company had not received a technical capabilities notice—an official order under UK law that could require companies to enable access to encrypted data.

Senator Wyden, who serves on the Senate Intelligence Committee, addressed the matter in a letter to Director of National Intelligence Tulsi Gabbard. The letter urged the US intelligence community to assess the potential national security implications of the UK’s surveillance laws and any undisclosed requests to US companies.

Meta, which offers encrypted messaging through WhatsApp and Facebook Messenger, also stated in a 17 March communication to Wyden’s office that it had ‘not received an order to backdoor our encrypted services, like that reported about Apple.’

While companies operating in the UK may be restricted from disclosing certain surveillance orders under law, confirmations such as Google’s provide rare public insight into the current landscape of international encryption policy and cooperation.

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Google backs EU AI Code but warns against slowing innovation

Google has confirmed it will sign the European Union’s General Purpose AI Code of Practice, joining other companies, including major US model developers.

The tech giant hopes the Code will support access to safe and advanced AI tools across Europe, where rapid adoption could add up to €1.4 trillion annually to the continent’s economy by 2034.

Kent Walker, Google and Alphabet’s President of Global Affairs, said the final Code better aligns with Europe’s economic ambitions than earlier drafts, noting that Google had submitted feedback during its development.

However, he warned that parts of the Code and the broader AI Act might hinder innovation by introducing rules that stray from EU copyright law, slow product approvals or risk revealing trade secrets.

Walker explained that such requirements could restrict Europe’s ability to compete globally in AI. He highlighted the need to balance regulation with the flexibility required to keep pace with technological advances.

Google stated it will work closely with the EU’s new AI Office to help shape a proportionate, future-facing approach.

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Google adds narrated slide videos to NotebookLM

Google has added a new dimension to NotebookLM by introducing Video Overviews, a feature that transforms your content into narrated slide presentations.

Originally revealed at Google I/O, the tool builds on the popularity of Audio Overviews, which generated AI-hosted podcast-style summaries. Instead of relying solely on audio, users can now enjoy visual storytelling powered by the same AI.

Video Overviews automatically pulls elements like images, diagrams, quotes and statistics from documents to create slide-based summaries.

The tool supports professionals and students by simplifying complex reports or academic papers into engaging visual formats. Users can also customise the video output by defining learning goals, selecting key topics, or tailoring it to a specific audience.

For now, the rollout is limited to English-speaking users on desktops, but Google plans to expand the formats. Narrated slides are the first to launch, combining clear visuals with spoken summaries, helping visual learners engage with content more effectively instead of reading lengthy text.

Alongside the new feature, Google has redesigned the NotebookLM Studio interface. Users can now generate and store multiple outputs—Audio Overviews, Reports, Study Guides, or Mind Maps—all within a single notebook.

The update also allows users to interact with different tools simultaneously, such as listening to an AI podcast while reviewing a study guide, offering a more integrated and versatile learning experience.

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Google brings AI Mode to UK search results

Google has officially introduced its AI Mode to UK users, calling it the most advanced version of its search engine.

Instead of listing web links, the feature provides direct, human-like answers to queries. It allows users to follow up with more detailed questions or multimedia inputs such as voice and images. The update aims to keep pace with the rising trend of longer, more conversational search phrases.

The tool first launched in the US and uses a ‘query fan-out’ method, breaking down complex questions into multiple search threads to create a combined answer from different sources.

While Google claims this will result in more meaningful site visits, marketers and publishers are worried about a growing trend known as ‘zero-click searches’, where users find what they need without clicking external links.

Research already shows a steep drop in engagement. Data from the Pew Research Centre reveals that only 8% of users click a link when AI summaries are present, nearly half the rate of traditional search pages. Experts warn that without adjusting strategies, many online brands risk becoming invisible.

Instead of relying solely on classic SEO tactics, businesses are being urged to adopt Generative Engine Optimisation. Using tools like schema markup, GEO focuses on conversational content, visual media, and context-aware formatting.

With nearly half of UK users engaging with AI search daily, adapting to these shifts may prove essential for maintaining visibility and sales.

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Chrome update brings AI shopping summaries to US users

Google has updated its Chrome browser to include AI-generated summaries of online stores, aimed at helping shoppers in the US make more informed buying decisions.

Instead of manually searching through reviews, users can now click an icon next to the web address to see a summary of a shop’s performance across key areas like product quality, pricing, returns, and customer service.

The feature is currently available only in English and is limited to desktop users.

The summaries are generated from a range of trusted review platforms, including Trustpilot, Bazaarvoice, Bizrate Insights, and others. Google says that the tool will offer a more efficient and secure online shopping experience.

It also helps the tech giant better compete with Amazon, which has already rolled out AI tools for product comparisons, fit suggestions, and ratings analysis. The move forms part of Google’s wider push to turn Chrome into a more powerful e-commerce assistant.

The company is also integrating AI tools like the Gemini assistant and developing agentic AI systems that can carry out tasks in the browser on a user’s behalf.

At the same time, Chrome faces fresh competition from AI-first browsers such as Perplexity’s Comet, Opera Neon, and a possible entry from OpenAI.

By adding AI-powered features directly into Chrome, Google hopes to future-proof its browser while strengthening its position in online retail.

As rivals begin to build intelligent browsers from the ground up, Google is reimagining how Chrome can serve users beyond simple search and browsing.

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Google seeks balance between user satisfaction and ecosystem health

At the Search Central Live Deep Dive 2025 event, Google’s Gary Illyes acknowledged that they are still calibrating how to weigh user needs, especially around AI-powered features, and the health of the broader web publishing community.

The company gathers internal survey data and tracks the adoption of external AI tools to assess satisfaction and guide product decisions.

While Google aims to enrich user experience with AI Overviews, critics warn these features may shrink organic traffic for publishers, as users often consume information without visiting source sites.

Illyes reaffirmed that Google does not intend disruption but is navigating a trade-off between serving users efficiently and maintaining a healthy content ecosystem.

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Google brings Gemini AI shortcut to Android home screens

Google has launched a new AI Mode shortcut in Android Search, offering direct home-screen access to its Gemini-powered tools. The upgrade brings conversational AI to everyday mobile searches, enabling users to ask complex questions and receive context-rich responses without leaving the home screen.

AI Mode, introduced in Google Labs and now available on a wide range of Android devices, marks a leap in integrating AI across Android’s ecosystem. The feature’s rise from a limited beta to mass adoption follows enhancements powered by Gemini 2.5 Pro and Deep Search, now with 100 million monthly users.

Key functions include multimodal inputs, advanced planning tools, and even the ability for AI to call businesses to verify local information. These capabilities are already live for paid subscribers, while core features remain free, drawing comparisons with rivals such as ChatGPT and Bing AI.

Privacy concerns surfaced as real-time interactions expand, but Google claims strong data protection controls are in place. As AI-powered results blend into traditional search, SEO strategies and user trust will be tested, signalling a new era in mobile discovery and digital engagement.

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Google launches AI feature to reshape how search results appear

Google has introduced a new experimental feature named Web Guide, aimed at reorganising search results by using AI to group information based on the query’s different aspects.

Available through Search Labs, the tool helps users explore topics in a more structured way instead of relying on the standard, linear results page.

Powered by Google’s Gemini AI, Web Guide works particularly well for open-ended or complex queries. For example, searches such as ‘how to solo travel in Japan’ would return results neatly arranged into guides, safety advice, or personal experiences instead of a simple list.

The feature handles multi-sentence questions, offering relevant answers broken into themed sections.

Users who opt in can access Web Guide via the Web tab and toggle it off without exiting the entire experiment. While it works only on that tab, Google plans to expand it to the broader ‘All’ tab in time.

The move follows Google’s broader push to incorporate Gemini into tools like AI Mode, Flow, and other experimental products.

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Google’s AI Overviews reach 2 billion users monthly, reshaping the web’s future

Google’s AI Overviews, the generative summaries placed above traditional search results, now serve over 2 billion users monthly, a sharp rise from 1.5 billion just last quarter.

First launched in May 2023 and widely available in the US by mid-2024, the feature has rapidly expanded across more than 200 countries and 40 languages.

The widespread use of AI Overviews transforms how people search and who benefits. Google reports that the feature boosts engagement by over 10% for queries where it appears.

However, a study by Pew Research shows clicks on search results drop significantly when AI Overviews are shown, with just 8% of users clicking any link, and only 1% clicking within the overview itself.

While Google claims AI Overviews monetise at the same rate as regular search, publishers are left out unless users click through, which they rarely do.

Google has started testing ads within the summaries and is reportedly negotiating licensing deals with select publishers, hinting at a possible revenue-sharing shift. Meanwhile, regulators in the US and EU are scrutinising whether the feature violates antitrust laws or misuses content.

Industry experts warn of a looming ‘Google Zero’ future — a web where search traffic dries up and AI-generated answers dominate.

As visibility in search becomes more about entity recognition than page ranking, publishers and marketers must rethink how they maintain relevance in an increasingly post-click environment.

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