Google secures a prominent place for its Gemini AI on Samsung devices through massive monthly payments and revenue shares. The contract is already attracting the interest of antitrust authorities worldwide.
Google and Samsung have entered into a far-reaching partnership to integrate Google’s Gemini AI on Samsung smartphones. The contract, which begins in January 2025 and runs for two years, includes fixed monthly payments per device as well as a share of the advertising revenue that Google generates through the use of Gemini. The agreement is reminiscent of previous deals between the technology giants, under which Google paid around 8 billion dollars between 2020 and 2023 to secure the pre-installation of Google services such as search and the Play Store.
The Galaxy S25 series will serve as a launch pad for this integration and will include a deeply embedded AI operating system developed in collaboration with Google. The devices will utilize Gemini’s multimodal capabilities for tasks such as real-time language translation, contextual recommendations and proactive assistance. For example, users can ask Gemini to summarize YouTube videos or create shopping lists based on calendar events.
Financial and strategic motivations
Google’s investment in Samsung reflects its broader “AI-first” strategy to dominate the generative AI market. By integrating Gemini into Samsung’s globally popular devices, Google gains direct access to millions of users and ensures that its AI tools become fundamental parts of everyday smartphone interactions. Industry analysts estimate the monthly payments to Samsung to be “enormous”, although exact figures are not known. For Samsung, the deal provides a lucrative revenue stream while enhancing the AI capabilities of its devices, which are crucial for competing with Apple’s iPhone and other Android manufacturers.
Notably, Samsung reportedly received competing offers from Microsoft, Meta and OpenAI to have their AI assistants pre-installed, but opted for Google due to the financial incentives and seamless integration with Android. The partnership also mitigates risks for both companies. Google avoids dependence on third-party app stores where Gemini could face competition, while Samsung secures advanced AI features without having to bear the full development costs.
Antitrust concerns and regulatory scrutiny
The Google-Samsung deal has intensified existing antitrust investigations into the dominance of Big Tech. In the US, the Department of Justice (DOJ) has highlighted the agreement as part of a pattern of “exclusionary conduct” during an ongoing lawsuit against Google’s search monopoly. Judge Amit Mehta, who had previously declared Google’s search agreement illegal, is examining whether the Gemini agreement further impedes competition. Internal Google presentations showed plans to bundle Gemini with Chrome and Search, which regulators believe could further consolidate Google’s market power.
In the European Union, the Commission is investigating whether the partnership restricts competitors’ ability to install AI apps on Samsung devices. A recent questionnaire sent to industry participants inquired whether the Gemini-Samsung deal restricts interoperability with competing services. Margrethe Vestager, the European Commissioner for Competition, highlighted concerns that such alliances could marginalize smaller AI developers and limit consumer choice.
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Summary
- Google and Samsung have signed a two-year deal, starting in January 2025, to integrate Gemini AI on Galaxy smartphones
- The agreement includes monthly payments per device and a share of advertising revenue
- Samsung received competing bids from Microsoft, Meta and OpenAI, but opted for Google
- Antitrust authorities in the US and EU are investigating the deal for anti-competitive practices
- The partnership could drive smaller AI developers out of the market and consolidate Google’s dominant position in the AI sector
- Despite allowing Samsung to integrate competing AI apps, Google’s financial incentives create hurdles for competitors
Source: IT Boltwise
