This story originally appeared in The Technology Letter and is republished here with permission.

A report Monday by Bloomberg’s Mark Gurman, citing unnamed sources, stated that Apple is in talks with Alphabet’s Google to bring the latter’s artificial intelligence mega-program, Gemini, to the iPhone. Gurman’s report raised but did not answer an interesting question, Who pays whom?

Gemini is a recently-released program from Google that can do things similar to OpenAI’s ChatGPT, but also a whole lot more, such as finding a particular moment in a video clips based just on the description the user types. The program can be used for free, and Google offers an higher-capability version, called “Advanced,” as part of a Google subscription that includes storage and Google Docs and other things, for $19.99 per month.

Gurman’s report stirred a number of enthusiastic reflections from the Street in the ensuing twenty-four hours. None of those observers can say, however, who is the one paying here.

That question is especially intriguing because Google already has a deal with Apple, which the U.S Department of Justice is suing Google over, to have its search engine be the default on Apple’s iOS devices, including the iPhone. That deal involves Google paying Apple an undisclosed sum that analysts have estimated at twenty billion dollars, annually.

In the case of the Gurman report, it’s not clear if Google would also pay Apple, or if the reverse would be true.

One view, put forward Tuesday by Merrill Lynch’s Alphabet analyst, Justin Post, is that “the report did not provide details on potential financial terms, be we assume Apple would be paying Google a technology license fee.”

Perhaps, but hold on. Writes Evercore ISI Apple analyst Amit Daryanani, “It could be structured similar to the current deal where Google pays a portion of search revenue to Apple in exchange for being the default search option on Safari.”

On the other hand, continues Daryanani, “We could also see a scenario where Apple is the one paying Google to license these features as it sounds like this could effectively be a white label deal.”

And Bernstein analyst Toni Sacconaghi is decidedly down the middle, frankly admitting the aporia: “Who would pay whom if Apple and Gemini partnered? Unclear.”

Sacconaghi writes that a “base case hypothesis is that Apple might pay Google nominally or not at all initially,” and then, “over time, as AI/voice based revenue models become more clear, we believe that Apple and Google could work out a revenue share agreement, similar to search.”

It’s possible, he further muses, that Google “could subsidize it in order to solidify its relationship with Apple, and get Gemini the rep it needs to be best-in-class,” as, “We believe that Google has as good a shot as anyone in monetizing AI down the road.”

It’s fascinating that no one is certain what kind of money is going to develop here: a big-ticket purchase by Apple to try to fill a yawning gap in its capabilities, or a big-ticket payoff by Google to try to round up an audience of two billion Apple users as a way to get ahead of OpenAI and its fiscal backer, Microsoft.

You could say that either scenario seems a bit emblematic of today’s “generative” AI, in that the stuff requires a lot of investment, and it’s not entirely clear how to monetize it yet. Google is collecting twenty bucks for Gemini Advanced, the same amount as OpenAI’s ChatGPT “Plus” subscription. Others have aped that pricing, such as startup Perplexity, which is selling subscriptions to its “Pro” version of its AI chat bot for $20 a month, as an alternative search engine free of the nuisance of advertising.

All of those parties are charging less than the thirty dollars per month that Microsoft is charging for the AI add-on to its productivity apps, Copilot.

In this early phase of Gen AI, the jury is out on whether the stuff is a big cost center, as it might be if Apple is writing a cheque to Google, or a budding profit center, as it might be if Google’s actually subsidizing the thing in order to make money “down the road,” as Sacconaghi suggests.

Gen AI is simply warping the business universe, making opposing business models, and opposing monetization schemes, equally plausible, which means it’s interesting times we live in.

On a much smaller scale, analysts were delighted on two counts. One, such a deal, whoever is paying, suggests Google is still in good stead with Apple despite the overhang of a Department of Justice lawsuit. And, two, since Apple is perceived as way behind every other tech giant on AI, it’s nice to know that they have options such as Google to help them while they scramble to catch up.

Meantime, the only party sure to be comfortably minting money off of all this is, you guessed it . . . Nvidia.

This story originally appeared in The Technology Letter and is republished here with permission.