Alphabet and Apple shares dropped following remarks from Eddy Cue, Apple’s Senior Vice President of Services, who said AI-powered search tools could eventually replace traditional search engines like Google. As reported by Bloomberg, Cue named services like OpenAI, Perplexity, and Anthropic as potential future options in Apple’s Safari browser.
Cue made the comments during his testimony in a federal court in Washington, where the US Justice Department is pursuing an antitrust case against Alphabet. A previous ruling found that Google had gained an unlawful dominance in the search market. The current trial phase focuses on determining the penalties or remedies that should be imposed. A major point in the case is Google’s payments to Apple in exchange for being the default search engine on Apple devices.
Cue noted that while Google should remain the default option in Safari, he is concerned about the financial implications if Apple loses that income. In 2022 alone, Apple received $20 billion from Google under this agreement. Cue admitted he had lost sleep over the issue, especially since Safari search volumes had dropped in April—possibly due to increasing user interest in AI tools.
The possibility that Apple might shift toward AI search alternatives raises questions about the long-term stability of the partnership between the two companies, notes NIX Solutions. Alphabet’s stock declined 7% in response to the news, while Apple’s fell 2%. Yet we’ll keep you updated as more integrations and developments unfold.
Google Stresses Continued Growth Amid Change
In response to Cue’s comments, Google issued a public statement to reassure stakeholders:
“We continue to see an overall increase in [the number] of queries in Search. The total number of queries from Apple devices and platforms has also increased. Overall, as we improve Search with new capabilities, people find that Google Search is more useful for more of their needs — and they come back to it to get new things in new ways, whether that’s browsers, the Google app, voice, or Google Lens.”
Google also emphasized ongoing innovation and teased future updates: “We’re excited to continue to build on these innovations and can’t wait to share more about them at Google I/O.”
As AI continues to evolve, the tech landscape may see significant shifts. Still, we’ll keep you updated as more information becomes available.