Google paid Samsung 'enormous sums' for Gemini AI app installs
Alphabet Inc. pays Samsung Electronics Co. an "enormous sum of money" every month to preinstall Google's generative AI app, Gemini, on its phones and devices. This information was revealed in court testimony by Peter Fitzgerald, Google's vice president of platforms and device partnerships.
The contract between Google and Samsung, which began in January, is set to run for at least two years. It involves fixed monthly payments for each device that preinstalls Gemini, as well as a percentage of the revenue Google earns from paid subscriptions for the app and ads.
Competitive Offers from Other AI Companies
According to Fitzgerald, Samsung also received competitive offers from other AI companies such as Microsoft Corp., Meta Platforms Inc., and OpenAI to include their AI apps. However, Google's offer to Samsung was ultimately accepted.
It is worth noting that the agreement between Google and Samsung allows the latter to incorporate alternative generative AI services if desired. In addition, Google recently amended its search agreement with Samsung to remove the requirement that only Google's search engine and personal assistant be pre-installed on Samsung devices.
Antitrust Concerns and Regulatory Actions
The court testimony comes in the context of the Justice Department's antitrust case, with Judge Amit Mehta presiding. Previously, Mehta found that Google's practice of paying partners to be the default search engine on devices violated antitrust law.
The Justice Department has proposed prohibiting Google from paying partners for default search engine status, extending this ban to Google's AI products like Gemini. The agency argues that Google's actions were supported by its illegal monopoly in search.
While the exact amount of money Google pays Samsung was not disclosed in court, it was described as an "enormous sum" in fixed monthly payments. This practice is not new, as between 2020 and 2023, Google reportedly paid $8 billion to secure default positions for Google Search, the Play Store, and Google Assistant on Samsung's mobile devices.
Future of Gemini AI App
In her testimony, Google's head of Gemini, Sissie Hsiao, confirmed that the app currently does not feature ads, although discussions have taken place regarding their inclusion. The internal memo highlighted the potential for monetizing Gemini with ads in the future.
Ultimately, Google's payments to Samsung for preinstalling the Gemini AI app raise concerns about antitrust issues and regulatory actions within the tech industry.
