Nathaniel Whittemore

That reporting was sourced from at least two advertising clients who requested anonymity to discuss the meetings.

They said that Google had not shared prototypes or specifications for how ads would appear in Gemini, suggesting the discussions were still in a very early stage.

And yet, the reporting was clear that this was about ads directly in the chatbot, rather than appearing through the use of AI mode in search.

Speaking with Business Insider last week, Dan Taylor, who is Google's VP of Global Ads, said there were no plans for ads in the Gemini app and elaborated on the distinction between Google's businesses.

Search and Gemini, he said, are complementary tools with different roles.

While they both use AI, search is where you go for information on the web, and Gemini is your AI assistant.

Search is helping you discover new information, which can include commercial interests like new products or services.

We see Gemini is helping you create, analyze, and complete that.

However, he did note that AI mode and search in Gemini are slowly converging with the introduction of AI shopping features.

Google is already offering ads in AI search, including a new feature called direct offers that presents a personalized discount in AI mode.

I think it's an interesting choice to fully deny that they've got these plans.

While on the one hand, I do believe that Google may see an opportunity to win some margin off of ChatGPT by holding out longer on ads, I don't think there's any chance in the world that Gemini's free version stays forever ad-free either.

But who knows, just holding out for a year, depending on consumer response to these ads, could be enough to make a difference.

Next up, Meta is rumored to be scaling back their in-house chip program.

Last we heard about the program in August, design had been completed in collaboration with Broadcom and Meta was ramping up orders.

In November, the Information reported that Meta was in talks with Google to order billions of dollars worth of their TPUs.

That potentially signaled a pivot away from their custom silicon, but the reports were very thin.

Now, analyst Jeff Poo of Haitong Securities reports in a research note that Meta is deprioritizing their deployment of custom silicon.

Poo notes that this lines up with a broader shift where the hyperscalers are more focused on immediate compute needs than self-sufficiency.

Still, Meta is reportedly looking for ways to avoid paying the NVIDIA tax.