Alphabet (GOOGL) is reportedly paying Samsung Electronics (GB:SMSN) (SSNLF) a huge monthly fee to preinstall its generative AI app, Gemini, on Samsung phones and other devices. This was revealed during court testimony in Google’s ongoing U.S. antitrust trial, where the U.S. Department of Justice (DOJ) is questioning its control over online search and AI tools.
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On Monday, Peter Fitzgerald, Google’s vice president of platforms and device partnerships, said that the deal with Samsung to preinstall Gemini started in January. The two-year contract involves fixed monthly payments to Samsung for each device with Gemini preloaded. Also, Samsung receives a percentage of the advertising revenue earned in the Gemini app.
This deal has sparked controversy. The DOJ says Google is using monopoly tactics to promote Gemini, like it did before with its search engine dominance.
Google’s Past Haunts Its Present Trial
Judge Amit Mehta, who is presiding over Google’s current trial, previously ruled that Google’s practice of pre-installing its search engine on Samsung devices violated antitrust laws.
In that case, a federal jury found Google misused its market power in the Android app market. Between 2020 and 2023, Google paid Samsung $8 billion to make Google Search, the Play Store, and Google Assistant pre-installed as defaults on Samsung devices.
These rulings reflect growing concerns over Google’s business practices and market control.
Perplexity Could Replace Google Gemini
In a major shakeup in the Android market, Perplexity, an AI-powered assistant, is in talks with Samsung to potentially replace Google Gemini as the default assistant on devices.
Perplexity stands out with its simple, search-engine-like design and real-time answers from the web. It uses powerful AI models from OpenAI, Anthropic, and Google.
If this deal happens, it could change how users interact with Samsung devices. Perplexity would give users a new option, different from Gemini or Samsung’s Bixby assistant. Perplexity’s features, like special tools for foldable phones, make it stand out.
Though talks are still early, this shows Samsung is open to trying new AI ideas, even if it means moving away from Google.
What Is the Price Target for GOOGL?
Turning to Wall Street, GOOGL stock has a Moderate Buy consensus rating based on 27 Buys and 10 Holds assigned in the last three months. At $196.94, the average Alphabet stock price target implies 33.36% upside potential. Shares of the company have declined 25.5% in the past three months.
