B (3:01)

The interesting thing here is exactly what Rachel touched on at the end there is that the money has long been flowing the other direction. So Google, the search engine is the default on iOS devices. That's really where the money is. It's also things like safari, but iOS is really where they're getting that traffic acquisition cost. That's the $20 billion or so that flows to Apple every year. Now Apple's paying for help with Siri. Is this going to fundamentally be a difference in the business model? Because I think if we are going to a world where we're not using search, we're using Siri, maybe that ends up costing Apple money.

C (3:38)

But not on the same scale at least, you know, I mean, right now Apple is still a net beneficiary with the two deals together. Based on what we know, you know, whether that changes, we'll see. But yeah, look, you know, it's funny. Rachel listed out all the reasons and I don't know, I'm not a tech guy, so maybe it's true. I always feel like that that justification is just written after you make the choice. More than that. For the press release, here's what I want to know. I really hope that OpenAI Jony, I've device that they keep teasing is worth it because this.

B (4:14)

Are you going to have the thing behind your ear? That was the image that came out this week.

C (4:19)

But here's the deal. Everything was fine between OpenAI and Apple, seemingly until OpenAI goes and buddies up with Jony. I've. And I couldn't help but notice the tone change there. I hope that was worth it. Sam, I think there's a lot of hubris here. OpenAI's two big moves are we're going to defeat the Chrome browser. We're going to go at Alphabet and defeat the Chrome browser, and we are going to revolutionize the device and make you not want your iPhone anymore by spending billions for Jony.

D (4:49)

I've.

C (4:51)

I hope it's worth it, guys, because in a way, I think any of these models could have worked. I think Apple did go with what they know and I think it might have something to do with the changing dynamics of OpenAI just picking fights. And it's great to pick fights if you can win them, but good luck.

B (5:09)

Sam, we've been talking a lot about disruption and is there going to be disruption to search, but is the better analogy just the tortoise and the hare? I mean OpenAI announces, Sora, that gets a ton of attention. But now it's, I think number 60 or something like that in the, in the app store. Nobody's really using that. They announce, you know, the browser like you mentioned, Lou, that doesn't seem to be winning a whole lot of business against Google and Chrome. And here you get Google just slowly but surely increasing their capabilities from an AI standpoint, building out infrastructure, improving their tpusc. It's not sexy, but it's slowly what seems to be winning. Is that the right way to think about it? Lou?

C (5:52)

From the beginning it was worth noting who needed the press releases. Right? You know, we get so caught up in the hype and the excitement. OpenAI doesn't have the revenue that, you know, Amazon, Alphabet, Microsoft, all these other companies have. They needed the press releases because they needed the hype. And it is easy as a consumer or an investor to get caught up with that and kind of not realize what, yeah, the tortoise is doing. I do think, I mean, I don't know if it's a tortoise and the hare because I don't think OpenAI is cooked. I don't think anything is decided. But I also don't think we were right when, you know, like, just like all the goo goo eyes about OpenAI were just as foolish as probably declaring them dead now. But they are just one company among many who are trying to sell the same product and they have structural disadvantages to their competitors and it's, you know, that's just what it is for them.

B (6:52)

Speaking of, there are developments in AI and shopping. We're going to get to that next. You're listening to Motley Fool Money.

D (6:58)

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B (7:53)

Welcome back to Motley Fool Money. The other big deal that was announced in the last week was Google came out with their answer to OpenAI's agentic shopping experience. I think we talked about this a couple of months ago when OpenAI announced shopping on ChatGPT. In theory, you could, you know, search for products. It would kind of do all the work in the background and then you could actually check out within ChatGPT where with stripe checkout, Google announced what seems very complicated, Rachel, but, but if you look at their releases, it kind of looks a little bit like a little bit of an improvement with a little AI stuck in, in search. Is, is, is that right? And is that maybe the better answer than just doing all your shopping with an agent?

A (8:35)

I think that's, I think that's fair. I think as we've been hearing these announcements about agentic AI and shopping rollout, we've sort of had this idea that, you know, one day there's this AI agent that does the entire process on our behalf, right? Searching for the product, handling checkout. There is sort of that element that we're seeing. But I think the bottom line here is a lot of these rollouts. And I'm going to talk about what Alphabet just unveiled, are really designed to make merchants more efficient and to help customers shop smarter and better. So Alphabet unveiled I think what is probably a very significant shift towards more agentic commerce at the National Retail Federation or NRF conference. And basically this new system that they unveile, it includes a protocol that allows different AI agents to communicate directly with a merchant's backend systems like carts, inventory and payment gateways. And it handles all of those really sticky elements like real time inventory checks, pricing and checkout. And this is across some major platforms like Shopify, Etsy, Walmart, to name a few examples. This new system and infrastructure also includes something called agentic checkout. So basically purchases can be completed and within Google Search or the Gemini app. It uses, you know, your saved Google Pay and Google Wallet information to complete transactions. And then kind of the third Key component, there was this new business agent that they introduced. So you've got retailers like Lowe's, for example, that have these virtual sales associates in the search results. And those agents can suggest products, loyalty rewards that can handle returns or support. So for example, what does this look like? You can tell Google a specific price that you're willing to pay for an item. And so when the price hits your target, that agent can use Google pay to buy it automatically from eligible merchants if you've given your prior consent. You could think about this as well for grocery shopping. Right. So theoretically, the agent could identify ingredients from a photo of a handwritten receipt or recipe and add them to a digital grocery cart. I mean, the options are kind of endless.

B (10:40)

Something that wasn't necessarily going to be within a lot of what they showed was within the Google apps. That would maybe be more on the developer side where I've seen the idea of like taking a picture of your fridge and being able to say, okay, do I come up with a meal for meal I would love, you know, with, with, with three kids, I would be happy to not have to do the shopping and just know that everything that we need for dinner for the next couple nights is going to be in the fridge. But we're not quite there yet. But it seems like this is at least their answer to OpenAI's agentic shopping. And, and it struck me that the two pieces that were interesting was that the identity piece was with Google, which we're very familiar with. I mean, even my OpenAI account is actually a. I sign in with Google, which I always have, always thought is really interesting.

A (11:28)

Yeah.

B (11:28)

And it's within sort of the products that we already know. So they have that distribution. They have billions of people who are using Google search. Also, you know, Gemini has, is gaining market share. So it seems like they're kind of leaning into those and baby stepping us to these agents rather than sort of tossing us into an agent world that we're not ready for.

A (11:46)

Yeah, and I think what's interesting about that is you have the, the ecosystem of Google search. It is just primed for these types of agentic AI rollouts. And I think again, it's much more about helping merchants become more efficient, helping customers shop smarter. I mean, you think about how, for example, you know, there's a specific item you want to buy for your house, but you really don't have time to go and scroll the Internet and find the best price and all those things. And so you could input these instructions about whatever the item is you Want to buy the price you want to pay and you can go about your day and whatever it is that you need to get done. And that agentic AI can handle, you know, the price comparison, the shopping on that side, it could save customers a lot of time. I guess what we still don't know is, you know, how much your customer is going to use this or are these changes going to be so subtle over time that eventually it kind of becomes integrated into our search habits?

B (12:37)

Yeah, that's what ultimately is interesting, Lou, is this does seem like a little bit more incremental. My question is, does this impact a company like Meta more than anybody else? The interesting thing for Meta is they are the discovery mechanism for a lot of these companies. If you bought, you know, a pair of pants or a shirt from, from one of these new startups, they're using that direct to consumer advertising because they don't have the infrastructure that a Walmart, that a target has. Does that now move to this agentic system which is just sitting in Google? That's a huge opportunity for Google. But does it suck business away from Meta in its family of apps?

C (13:14)

Maybe. But there's a big thing you're missing in that equation. Meta has the eyeballs and, you know, not that Google doesn't, but as long as people are on Meta's platforms and Meta can serve ads that are seen by a large number of people, I don't think that they're impacted. The question is, is that do, like Rachel said, do habits shift, do patterns shift towards this, this style and we somehow, you know, ads are less effective. I want to just, I mean, look, I think this is great for Google, but the universal commerce protocol I think is so interesting because, you know, universal, they're basing it on the, the upc, the universal product code. Right. That is sort of the inspiration here from the 60s, that barcode. Travis, what was the tech company behind that? And did they dominate the world of commerce because of it?

B (14:03)

Ooh, I don't know exactly.

C (14:06)

Well, I mean it was IBM and they spun out of ncr so, you know, kind of the cash register. But look, this is back office. This is trying to make sense of the chaos which I think could help all of these companies develop. If it is a standard that is. I think it pushes the ball forward for everyone. It might get. I don't think this really adds to Google's advantage. I think Google's advantage is in all the ways we've already talked about it, the Chrome browser, their reach into now iPhones and Android Phones, all of these things are working for it. I don't think setting up sort of the organizing the back office. I think they're doing the hard work that everyone's going to use. And I don't think it means gloom and doom for anyone. It just kind of puts the paint on the field so we can play, if that makes sense.

B (14:57)

Yeah, interesting. We'll see how this plays out. But it does seem like the winners of the past just seem like they're going to be the winners of the future. Because the disruption angle just has not played out the way that you might think in some of these huge partnerships. Apple working with Google again, Google working with Walmart. This is kind of what we've seen for the last 20 years. When we come back, we're going to get an update on earnings from Delta. You're listening to Motley Fool Money.

D (15:22)

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B (16:29)

Drink AG1.com Fool welcome back to Motley Fool Money. We are starting to get a little bit of earnings news. Banks and airlines are kind of the first things that we're going to hear from Lou. Delta reported earnings. I want to get your your thoughts on what they reported and kind of what it means for the economy overall.

D (16:46)

Yeah.

C (16:46)

Okay, so this very well discussed on what it means for the economy. So let's talk about it. They beat they also margins were a little light. A lot of that was the government shutdown I think because fuel expenses were down. So I think people are mostly dismissive of the margin, it's about 50 basis point loss. I think they'll make that up. The guidance was pretty strong too. I mean the stock kind of went nowhere. But it was a sell the news thing because they, you know, the stock had been up going into it. The big thing everyone's talking about is and actually Delta management leaned into this. They said they are at the top of the K. This idea that the K shaped economy where there's have and have nots and the haves continue to spend the have nots haven't. We actually saw main Cabin revenue fall 7% but that was more than offset by non main cabin cabin revenue up 9%. And actually in the quarter that non main cabin the everybody other than the just base fare, that revenue total was higher. There's a lot of people reading into this as far as like what we can read about the economy. I personally would hesitate there because I think this more show Delta tried to reinvent pricing 15 years ago. And what they tried to do was figure out a way that back then, I mean this is so old Travis. They called it machine learning. That's how old it was. But just to kind of price per seat the way when you have a fixed inventory you try and do this shows me that they are are that it's working. I don't think this really tells us anything about the economy. What this tells us is Delta is very effective at maximizing per seat revenue to the point where less and less of it is just the generic ticket. And more and more of it is whether or not, you know, you want to sit together, you want a little extra leg room, all of these perks. That's what's being reflected. I think it's more of a story of what Delta is doing right than it is what's going on in the economy. I get that. I subscribe to the K shaped thing. I just think people are overreading the, the tea leaves when they attribute all of, all of what Delta did to macro factors.

B (18:49)

So I want to understand this a little bit better because yeah, there was a 9% increase in what they call premium products for tickets. Does that include both the higher price and the fact that like for example, I traveled a couple of months ago with my wife. If we wanted to sit together, we had to pay extra. Does that make us now premium customers?

A (19:11)

Yeah.

B (19:11)

And now maybe instead of having, you know, as a kid you would think of first class. There was, I don't know, 20 seats on a plane that were first class and then there were a hundred Seats that were not first class. So your ticketing was, you know, 80, 20. But now it seems like a larger percentage of the tickets are falling into premium. Even if they're not the old school premium first class. It's, you know, comfort or whatever the multiple tiers are is that the we're not only having higher prices on those tickets, but also that there's more of those premium tickets?

C (19:43)

Right, that's it exactly. And I do think, look, it's to the bull case for this year. The upside is that main cabin, I think it could bounce back. But yeah, what we're seeing is just that baseline ticket is falling in a share in terms of the total share of tickets. It's all of those things you're talking about. It's just pricing for what consumers want or what are willing to pay for. That's a great thing for the airlines. You can get into whether or not it's a great thing for the consumer. But Delta and United are very at this and I think that's what you're, that's what's showing through more than it is, you know, some dramatic statement about the economy or where we're headed.

B (20:23)

Rachel, you're maybe our travel expert here on the Wednesday show is, is that what you're seeing is that maybe it's not about people traveling less, but they're just, they're just maximizing the amount of dollars that they can get out of each of these seats?

A (20:37)

I think that's part of it. But I do think we are seeing a split in consumer behavior. I don't necessarily think I agree with Lou. You know, we shouldn't necessarily read the tea leaves through Delta' but I do think they reflect kind of the broader trends that we are seeing. You know, Just generally speaking, high income travelers are spending more freely on premium travel. Price sensitive consumers are showing fatigue where that's concerned. And you know, Delta has been investing in its premium cabins in new aircraft. They've really signaled their focus on these higher margin offerings to drive future growth. And I think we see that bear out, you know, in their results as well. A lot of the consumer spending growth is driven by the wealthier households who are purchasing those higher ticket, you know, discretionary items. And of course, you know, Delta is the first of the airlines to report we've got throughout the rest of January, got United airlines, American Airlines, JetBlue. It'll be really interesting to see. But Delta again, they had, you know, record revenue year for their full year, 2025 and that 7% increase in premium revenue was really key as well. So I think, if anything, we're seeing the results of the current macro environment bearing out in their, their financials.

C (21:45)

The good news is if it is macro, there's a lot of affluent people because if you look at the TSA numbers, they're up year over year. So I mean, it isn't that. I mean, if it was just, it's.

B (21:56)

Always a shocking, shockingly small number of people that actually fly, though, when you look at.

C (22:00)

Well, right, right, Travis. But if it was just premium that was driving this, if it was just that the haves are flying and the have nots or aren't, which is kind of the K shaped story. There's a lot of haves because across, across the domestic industry, travel is up again. I hear the K shape stuff. I believe the K shape stuff. I just think that this is a poor. I don't think that's what we're seeing here. I think the knee jerk yesterday on that was a little bit overstated.

B (22:32)

So looking for signal and noise. This is maybe a little bit more and noise. As always, people on the program may have interest in the stocks they talk about and the Motley fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows the Motley Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes for Lou Whiteman, Rachel Warren and dad Boyd. Behind the glass Pass. I'm Travis. William. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.