Why Google Won’t Talk About Apple

0:03This right here is the Daily Tech News for Thursday, February 5th, 2026. We tell you what you need to know, we give you some important context, and we try our darndest to help each other understand. Today, great news for Google means more conspiracy theories about Apple. Of course. I'm Tom Merritt. I'm Quint Whitdown. Let's start with what you need to know with that big story. All right. So Alphabet released its earnings on Wednesday. We always like to pick out some of the highlights when these earnings reports are particularly interesting, which I think this one was. Top line is revenue still growing.

0:37There were some questions about in this AI era, can Google keep it up? But it's up 15 % on the year. Net income was up 24.3%. That's where you take out a lot of the costs. And 74 % of that was ad-based. Ad revenue rose 17%. Google says Gemini has improved ad relevance. It's the first time I've heard them really push this line that, no, the AI isn't going to reduce. It's going to help the ad revenue. They tried to argue that it lets them deliver ads on longer, more complex searches that were harder to monetize in the past because Gemini can help them figure out the intent of the search and then target the right ad there.

1:19YouTube revenue rose 17 % with 325 million paying users across YouTube Premium and Google One. That's all packaged together. there. That's up from 300 million last quarter. So another area where they are making money that's not ad-based subscriptions. Side note there, YouTube Shorts recorded 200 billion average daily views. That's even from last year. So that did not rise. And Google Cloud revenue, up 47 % on the year. That's something Google would really like to see. Of course, they're still in the growth phase of where they had a very small amount. So it's easy to make these big gains. But Google says it's ready to spend some of that money it's making.

1:58It announced it will almost double its capital expenditures. That's stuff it spends on infrastructure from$91.4 billion that it spent last year to spending between$175 and$185 billion this year. 60 % of that money will be to upgrade assets to newer devices. So their own TPUs, but also buying new NVIDIA GPUs. And they say they're going to split that evenly between running Google itself, its own business needs like search and everything, and Google Cloud, which is providing assets for customers to use. And then 40 % of all that money is going to go to just building new data centers altogether. So 60 % is upgrades, 40 % for building new stuff.

2:42They have a lot of money. $400 billion came in just last quarter, free cash flow of$24.5 billion. Uh, so they're bringing in the cash. They've got it to spend. Uh, a couple other stats here. Gemini has more than 750 million monthly active users. That's up a hundred million from last quarter. So if you're keeping track of the race between them and Claude and Chad GPT, that's an important one to look at. And one aspect of the earnings call that got a lot of notice was CEO Sundar Pichai's reticence on talking about the deal with Apple to provide Gemini as a service, to use Gemini to power Apple's Siri and foundation models.

3:26Pichai really didn't want to answer the question. This is what he said. We are collaborating with Apple as their preferred cloud provider and to develop the next generation of Apple foundation models based on Gemini technology. It's all stuff we knew. He would not expand on that. Now, a lot of outlets are trying to stretch this to say, oh, well, if they're the cloud provider, then it's not private cloud compute. and maybe Apple is hiding something about how this works or maybe Google is hiding something or maybe they're lying. I think Apple insiders Wesley Hilliard probably nailed it when he wrote, and I'll just read what he wrote.

4:00Apple and Google have partnered to utilize a version of Gemini built to run on Apple's private cloud compute servers to train Apple Foundation models and make them more capable. The resulting Apple Foundation models will then power Apple intelligence and Siri both on device and in private cloud compute. And those servers will be either Apple's or Google's while upholding Apple's privacy standards. And he points out that Apple uses Google Cloud for iCloud right now. And iCloud has security and security guarantees. So I think a lot of people are trying to look for something that makes a headline, but honestly, everything everybody is saying could all be true at the same time.

4:41yeah i mean i i think that you're spot on that probably like um wesley's take seems like the most reasonable and it's not unlike anything we've seen previously or like there's precedent for this kind of like you know like um just an abstract of like the way that on-premises are like kind of private like installations work and how private cloud computing works so i don't i guess it's just so fascinating just because again in the context of the revenue increases and and the kind of success that Google has been seeing, how does what we understand to be the competitive relationship between Apple and Google function in the context of all of these other changes and the broader AI, what else they call them, AI wars, the AI shenanigans in the world today.

5:31I know it's not shenanigans. Shenanigans is not the right word, but it's just so interesting how these different companies interleave and then have their own independent, obviously, independent you know um sorry uh their own independent you know businesses and and like uh initiatives so i don't know it's interesting i mean it's one of the things that i think befuddles people about google is that they are so big that parts of them compete with each other right like you know uh the the android team is probably not happy that google cloud is going to provide any kind of service to Apple for its phones, certainly Gemini.

6:09But that's not that it's not unusual for big companies to have that situation. I mean, we've seen I always think of Sony as the biggest example of this, where parts of Sony were suing other parts of Sony for copyright infringement at one point in its history, because you have the movie business and you have the gaming business and then You have the computer electronics business, consumer electronics business. So I think Google is just that vast. I think what's interesting is Apple is a little more narrow. And so it is more on the client side of these things. Apple isn't a big cloud provider to the enterprise the way Google is.

6:47Apple doesn't run its own search engine. It, you know, so it's a big company. It's as big of a company in market cap as Google, roughly speaking. but it is not as wide and varied in what it does. That's actually, I kind of forgot that because I've worked at several big companies where we have multiple products. None of these companies I worked at are even approaching the size of Google, not a huge conglomerate, but even in say like a mid-large, a fairly large company where you have competing, where you have multiple products and especially if some of those products come in through acquisition and these products grow over time and a lot of times these products will grow out and either reach different demographics or widen their feature base, you will get even at a mid-sized company, a mid-sized large company, that makes no sense, but you know what I mean?

7:34Not a Google size, but a regular large company. You will have products cannibalizing like other features, other demographics. And then, yeah, it becomes almost, and it's weird because at the same time, I feel like at least the companies I've worked at, there's an acknowledgement of this cannibalization. And so the challenge for them is to either somehow coordinate things and integrate things if it makes sense, depending on their products or kind of just let it go and, you know, and see like who gets out of Thunderdome with the, with the users and the money. It depends on the management style, right?

8:07The managers may have that Thunderdome, like, I don't know, best man wins, go for it sort of situation. Or it could be a, Hey, you know, the company wins if we all win. So coopetition, not competition. And I've worked under both at the same company. I remember CNET had a, you know, a battle between download.com and the reviews side because they all, they both reviewed things. Right. And, and I, and different people who were in charge had, had different ways of managing that relationship. Can I ask you something? Like, I think obviously like the big question for me was, okay, how much of this revenue can we genuinely and kind of concretely link to AI and its adoption?

8:52Because that's like the big question. That's like what I think about like half the time during my day, whether I want to or not. Looking at the breakdown, looking at the numbers, from your perspective, what do you think is an earnest like, okay, this is the benefits, this is like the fruits of AI ripening versus kind of like, you know, we feel like we've been tracking numbers like this all the time. And there's like different reasons why, you know, for example, ad revenue might go up. From your perspective, do you think that there is merit? That's not a pun. There's you to maybe like the thought or whether it's marketing, PR, whatever, that AI is bringing about, or not that Google is necessarily saying this, but like the perception that AI is powering this significant increase.

9:37Yeah. I think you probably could find actual effect on the subscription levels because of Google one, including some Gemini products in it. I think you definitely see Google cloud increasing because of what Gemini offers and what it can do. I think that's having a material effect trying to say that it's, it's part of the reason that the ad revenue is good. I think the ad revenue is just good because nothing falls that fast, right? People are still buying ads the way they always have. Just it took forever for companies to move ad spending to the web in the early 2000s. You know, I was on the front lines for that at techtv.com.

10:20And so it's going to take a long time for people to change their ad spending to say, oh, well, there's no AI or I'll spend it on AI or something like that. So I think it's way too early to see it there. But I think we might see the early evidence of it in some of these other places. And all the companies say that they can't provide enough capacity for the demand that they are being asked for. So, you know, we'll see that in other earnings reports that we look at, but companies are saying we can't build fast enough to satisfy all the customers who say they would like to buy our capacity. So I think that part is real.

11:02Now, whether that's a bubble that pops and that capacity, that demand suddenly goes, you know, we said that, but we don't need it anymore. Well, that's the big question. Okay. Yeah. I think it's just always hard to parse a little bit just because I know that there's always like a difference between like what someone hopes that you believe or, and, and, and like what the actual truth is and, and, and how that actually affects things going forward. So thank you for that. Um, because yeah, I don't know either. Yeah. Well, I mean, especially as someone who's a bit bearish on AI, I do want to be kind of honest about whether honest with myself and other people about how much this is driving revenue and whether that I guess what is the source of that revenue.

11:42So I appreciate that. Yeah. All right. Well, you know what? We appreciate you because DTS is made possible by you, the listener. We want to take time to thank Tim Deputy, Brandon Brooks and Joni Hernandez. Yes. Real, real human people. Yes.

12:00There's more we need to know today. Let's get to the briefs. All right. Well, Google launched a teaser for the Pixel 10a, showing off the form factor and announcing pre-orders will start February 18th. The biggest design change from the flagship 10 is that once again, the A version for the A version, the dual camera system is now flush with the rear instead of having that very kind of now, I think, fairly enough, iconic, you know, Pixel bump or visor. No pricing or other details were announced. Yeah, I feel like some people see this as an advantage. You know, it's not only the price, but also the fact that you can lay it flat on the table.

12:38A table and it doesn't, yes. As someone who's had many pixels slip off their couch, yes, you'd be surprised. So thank you. Software company stocks have been declining for the past few months as investors worry that LLMs will eliminate the need for software. This, while some of those same investors are worrying that there's a bubble in LLMs and the companies are going to go to bust. It's kind of holding two opposite ideas in your head at the same time, which is a sign of genius. The latest scare came from Anthropik's Claude Cowork, which can automate some contract reviews and legal briefings. And a lot of people were saying, oh, well, we won't need Thomson Reuters anymore or other kinds of legal software because we can just do this.

13:21Meanwhile, software companies are facing headwinds from declining corporate spending that does not directly relate to using LLMs to replace software. So their balance sheets aren't looking as good as they would otherwise, because there's just a general downturn there. So it's hard for them to prove that this isn't happening. A few hardware CEOs, though, were out making the case that this does not make sense. NVIDIA chief executive Jensen Huang said on stage at Cisco Live Tuesday, it is the most illogical thing in the world. I think that's overstated. I can think of some other more illogical things.

13:54But he said, it is the most illogical thing in the world, and time will prove itself. And then ARM boss, Rene Haas, called it micro hysteria and added, as I look at enterprise AI deployment, we aren't anywhere close to where it can be. Basically arguing like, if it's going to do that to software, it's not going to be anytime soon. Like we're not at the point where that's a concern. ARM is in an odd place itself as evidenced in its latest earnings as it faces big revenue gains from data centers using its chip designs. but declines from smartphone, which are expected to struggle to sell as component prices like RAM rise in response to that same data center demand.

14:38So ARM makes a lot of money off the smartphone industry. Smartphone industry is probably not gonna sell as many smartphones this year because they can't make them at the right cost. And so ARM is gonna benefit from one but lose from the other. Qualcomm is facing the same dilemma. Both companies posted strong revenue growth but missed expectations for their forecasts because of all of this. Amazing. The RAM issue continues to just splatter all over. Oh, yeah. It's the theme of today's episode. It's like component prices going up, mostly RAM, also a little bit solid state drives, but then that's causing other things to go up and it's going to spiral up and up and up.

15:21All right. Well, speaking of that, then Motang posted this to one of our, to our, to our subreddit. Valve announced that it still is not ready to announce the price or availability of the forthcoming Steam Machine desktop PC and Steam Frame VR headset. It still plans to launch both in the first half of the year, pushing out the latest date to June 30th. Guess what? It all comes down to RAM. Valve said in a blog post, when we announced these products in November, We planned on being able to share specific pricing and launch dates by now, but the memory and storage shortages you've likely heard about across the industry have rapidly increased since then.

16:00The limited availability and growing prices of these critical components means we must revisit our exact shipping schedule and pricing, especially around Steam Machine and Steam Frame. So there you go. I hate to be the one to say this, but I'm starting to get the distant aroma of that story where it's like, remember the steam machine? Remember how they announced it and then they could never launch it? I'm not saying that's going to happen. In fact, I very much hope it doesn't happen. And I'm pretty sure if I were in the room with someone from Valve, they would look me in the eye and say, shut up, Merritt.

16:34It's not going to happen. But it does start to feel like, you know, things are out of their control, so to speak. And hopefully they will go right and they'll be able to ship it. But you just never know. I mean, it's like the unstoppable, hold on. I keep using this phrase recently. Unstoppable first versus the immovable object. The unstoppable force being AI adoption and data centers just exploding everywhere. And I don't know what the immovable object would be. maybe just like the baseline RAM requirements that the world outside of data centers and AI needs. So yes, yeah, no idea. But I hope you're wrong.

17:13Well, no, I hope that that's not true. I hope it's not true, but we'll see. I hope that scent is a hallucination. All right, let's bust a little thud here. Shortly after TikTok spung out its US data center and algorithm operations into TikTok USDS. They had the worst possible scenario because there was a data center outage because of a power problem. That is not up for debate. There was in fact, that is confirmed. They lost power at a data center and it caused problems in how videos were served and created. Worst possible timing for something like that to happen. It was weather related. This was not incompetence, just bad luck.

17:56However, because we are humans and humans always want to find the tiger in the grass, a bunch of people jumped to conclusions that the new ownership was doing this on purpose or was censoring feeds. I want to point out that Oracle has been running the servers for TikTok USDS for years because USDS existed as a subsidiary of ByteDance's TikTok. The main things that changed on January 22nd, where they now are retraining the algorithm for US users. And we have different owners of TikTok USDS. But a lot of people pointed to videos disappearing about content they found important. Like, why can't I get this kind of content in my feed suddenly?

18:38So Good Authority, which is an outlet funded by Carnegie Corporation, the Democracy Fund and Vanderbilt University, published an analysis from eight academics to see if they could find evidence that a particular kind of content was harder to find during that data outage. In other words, was this a smokescreen? Were they actually putting their thumb on the scale? They could not find evidence of that. That actually doesn't mean it didn't happen. It means given what they could see publicly in the data, there's no evidence of that. They used viewership metrics from more than 100 ,000 videos, compared them between five political topics and then other non-political topics to see, ah, did one of these rise or fall faster?

19:22Posts about all the topics dropped to almost zero during the outage, and all of them began to recover at the same pace once the outage ended. So did not appear from what they could see that there was any algorithmic manipulation going on for these topics. It's interesting because I guess the problem is, at least from a user perspective, is that we live in a world of algorithms where everyone is trying to tune the content that they serve you based on what you've already preferred. And so if your feed is already geared towards things that you agree with or certain perspectives that you want to see, and then an outage happens, it's easy, I understandably, it's easy to make that correlation between, okay, this particular flavor of thing that I like to see is no longer happening.

20:04What is, and especially given the social context, everything, totally get it. But yeah, it makes sense. I think the FUD, I think the FUD is not so FUD-y in this case. I don't, or hold on. i'm sorry i'm a little bit sick today it's just not coming is this there's not as much fun as fear and loathing and fear fear uncertainty uncertainty and doubt i think you know so it's very fuddy today is it fuddy is it fuddy-duddy and not like really pilly at anyway i'm gonna stop talking now no but so so you think there so you think there should be some fear uncertainty and doubt that's what no no no i think i think there should be less of it because Yeah, yeah, yeah.

20:40Okay. Yeah. Sorry. Gotcha. No, that makes sense. My bad. Less, less, less of it. The FUD, fun, not FUD. Let's agree on that. Fun, not FUD. There we go. You know what's fun? Not FUD. Not FUD, but live with it. Hosted by Sarah Lane every week, looking at the tech that she and other folks have been spending months living with because they need it. She's been testing out a smart dog collar on her dog Rex. That's going to be in an upcoming episode. Our editor of today's show, Hammond Chamberlain, is on this week's Live With It talking about the tour box, this like cool accessory that can like supercharge your video editing, your audio editing.

21:22You got to check it out. Listen to Live With It wherever fine podcasts are traded or sold or watch it at youtube.com slash daily tech news show.

21:35And now some quick headlines that are just good to know and might make you look smarter in the future. Well, during its largely positive earnings report, Sony said it has shipped 92.2 million PlayStation 5 consoles. Those shipments in the most recent quarter were down 16 % on the year. The PS5 is heading into its sixth year since launch. Wow. Oh. Substack told users it discovered on February 3rd that attackers had accessed user email addresses and phone numbers back in October and so warned that your information might be out there and could be used in a phishing attempt, but no financial information or anything else was accessed.

22:11The information sources say that for the first time since the 1990s, NVIDIA will go this year without releasing a new consumer GPU and will also reduce production of the current RTX 50 series cards as well. Yeah, there's another one. It's because of the RAM. OpenAI announced a new product for enterprise companies called Frontier. The product is meant to make it easier to build, deploy and manage agents in a corporate setting. Ukraine's defense minister says SpaceX has shut down unauthorized Starlink terminals being used by the Russian military and published instructions for registering authorized terminals to be used by the Ukrainian military.

22:51The US FCC has cleared Logos Space Services. This is from a former Google engineer. To launch more than 4 ,000 broadband satellites into low Earth orbit by 2035, they are going to create their own space-based internet service, a la Starlink. Well, Spotify is partnering with indie bookselling platform Bookshop.org to let Spotify premium subscribers buy physical books through the Spotify app. Not with Amazon. Not with Amazon. Yeah. That's kind of cool. I like it. I love Bookshop that way. Bookshop partners with your local independent bookstore to do delivery. It's so cool. I love that. Love it. With its February 10th update, Overwatch 2 is dropping the two.

23:33It'll just be Overwatch again, just like the original one. Well, daily Snapchat users fell by$3 million to$474 million last quarter, But net income rose from$9.1 million a year ago to$45.2 million. Yeah, so they stopped spending a bunch on marketing, lost a few users, made a lot more money. So, all right. TSMC plans to make some of its most advanced three-nanometer process chips at its plant in southern Japan. That's a factory that was previously planned for seven-nanometer production. So, a big upgrade. leaker ice universe claims that the forthcoming galaxy s26 ultra will not have built in chi 2 magnets forcing users to continue to rely on the case really and this yes really and i forgot what it is but this is that chi 2 ready versus chi 2 compatible thing that i keep getting tripped up on and please no please can we just have them please just give us magnets in the phone please please place.

24:36Well, fingers crossed that leaker ice universe is wrong this time. Although he's not, or they are not usually wrong. Following on the heels of moltbook, a social network for agentic models is gizmo, a TikTok like feed of vibe coded mini apps. You just type what you want it to do. It'll create an interactive experience like a puzzle or a small game. It is available on Android and iOS. Well, we end every episode of DTNS with some shared perspective. Today, Stim is back with an on-the-scene account of 8K. Stim writes, I've only seen 8K once, but it was incredible. Now, admittedly, it was on YouTube's Joshua Tree 30th anniversary tour, and the said 8K screen was the entire length of the end zone in a football stadium, 61 meters by 14 meters high and a slight curve to make things look even more like 3d but it was unreal one song was accompanied by drone footage flying through a forest and when the drone bank to make a turn i noticed the footage was so immersive and real that i found myself leaning along with it also some of just the deepest colors i've ever seen on a screen probably not room for a screen that size in my living room anytime soon but it has me holding out hope for what 8k could do at smaller sizes someday.

25:58Amazing. I love that. I really love that. But yeah, how big, I don't know. It feels like the ramp up from, it's so like, there's like this algorithmic, or not algorithmic, exponential curve from like when we had like, you know, 1920, like high, sorry, HD first came in. And now like, we just can't, our eyeballs just can't keep up with 4K and now 8K. It's just amazing. The benefit of 8K is when you're closer to it. So I'm guessing the reason Stim was blown away is that it was just a higher resolution screen than stadiums had had to that point. I think a lot of the stadiums have these higher resolution screens now and they're all fairly impressive in my experience.

26:42So I'm curious if Stim has been to a stadium, whether for a sports event or a concert or anything since then and been able to compare. Because it would be odd that 8K would be at its best advantage when you're that far away from it. And the color certainly doesn't have anything to do with 8K. That's just really good color management and all of that. So nevertheless, U2 was on the forefront doing 8K screens back in 2010 or whenever that was. Yeah, for sure. They like their visual spectacle between the sphere and 8K. Well, maybe it'll be a U2 16K show whenever we get to that point. I don't know if I have enough eyeballs or I have two eyeballs, but I don't know if my eyeballs have enough resolution for that.

27:30But hey, what are you thinking about? Do you have some insight? Have you seen an 8K show and been blown away as well? Well, we want to know. Share it with us. Feedback at DailyTechNewsShow.com. Yes. Thank you, Stim, for contributing to today's show. Thank you for being along for Daily Tech News Show. You keep us in business, folks. You can get the show on the Substack without ads. DTNS.substack.com. Same goes for Patreon. Patreon.com slash DTNS.

27:59The DTNS family of podcasts. Helping each other understand. Diamond Club hopes you have enjoyed this broker.

28:12All good?