Google parent Alphabet’s shares fell over 8% after Apple executive Eddy Cue said that the company is “actively looking” at adding artificial intelligence-powered search options to its Safari browser. This could potentially deal a big blow to Google’s dominance of the lucrative search market.
At 2:52 PM ET, shares of Google were down 8.8%, wiping off over $150 billion from Alphabet’s market value. Apple stock also fell after Cue said searches on Safari fell for the first time last month due to users increasingly turning to AI, a Reuters report said.
According to the report, the Apple executive made these comments while testifying as a witness for Google in the US Department of Justice’s (DoJ) antitrust case over Google’s dominance in online search.
“Google is the default search engine on Apple’s browser, a coveted position for which it pays Apple roughly $20 billion annually, or about 36% of its search advertising revenue generated through the Safari browser, analysts have estimated,” the report said.
The report said that both companies and the DoJ did not respond to requests for comment.
What was Eddy Cue’s testimony?
During his testimony, Cue said that searches on Safari fell for the first time last month, which he attributed to users increasingly turning to AI, a Bloomberg report said.
He said he believes AI search providers, including OpenAI and Perplexity AI, will eventually replace standard search engines such as Google, and that Apple will add those players as options in Safari in the future, according to the report.
“We will add them to the list – they probably won’t be the default,” Bloomberg cited Cue as saying.
Challenges Google could face ahead
Reports suggest that any shift in Apple’s approach could reshape the search landscape, given its vast installed base of around 2.5 billion devices. Apple is one of the world’s most influential gatekeepers for online search.
Besides, Google is already facing fierce competition from AI startups such as OpenAI and Perplexity AI. While Google is trying to secure an agreement to embed its Gemini AI technology in Apple’s latest devices, the latter has already struck a deal with OpenAI to offer ChatGPT as an option in Siri.
“The loss of exclusivity at Apple should have very severe consequences for Google even if there are no further measures,” Reuters quoted D.A. Davidson analyst Gil Luria as saying.
“Many advertisers have all of their search advertising with Google because it is practically a monopoly with almost 90% share. If there were other viable alternatives for search, many advertisers could move much of their ad budgets away from Google,” Luria added.
(With inputs from agencies)
