Key Takeaways
- Google’s stock dropped over 7.5% after Apple indicated it’s looking into AI search engines for its Safari browser.
- Apple is exploring AI search despite a $20 billion yearly deal making Google the default in Safari, a pact highlighted in Google’s antitrust trial.
- A recent dip in traditional Safari searches suggests users are beginning to prefer AI-based alternatives, according to Apple’s Eddy Cue.
- Apple isn’t planning to replace Google as the default immediately, mainly due to the significant revenue, but anticipates AI will eventually lead the search market.
- Google is also heavily investing in its own AI search features to stay competitive.
Google’s stock took a significant hit, falling more than 7.5% on Wednesday. This followed news that Apple’s senior vice president of services, Eddy Cue, revealed the company is exploring adding AI search engines, like Perplexity, to its Safari web browser.
Cue’s comments emerged during Google parent Alphabet’s antitrust trial, according to a report from Yahoo Finance which cited Bloomberg for the trial specifics. It was also highlighted during the trial that Google pays Apple a substantial $20 billion per year to have its search engine as Safari’s default option.
This potential shift by Apple comes as Cue shared that Safari experienced its first-ever drop in searches last month. He attributed this decline to users increasingly turning to AI-powered search tools.
Apple has already started integrating AI search, offering ChatGPT through its Apple Intelligence platform. While Cue stated Apple isn’t rushing to replace Google as the default—largely due to the considerable revenue the deal generates—he believes AI search apps will ultimately take over from standard search engines.
In response to this evolving landscape, Google has been working hard to catch up with AI startups like OpenAI and Perplexity. The company is keen to secure its place in the AI search market, having already launched “AI Overviews” in its standard search and currently testing an “AI Mode” similar to ChatGPT and Perplexity.
Google already has an AI search product in Gemini, though it operates separately from its main search. Microsoft also offers an AI competitor with its Copilot search. Google’s deal with Apple is one of several strategic partnerships, including one with Samsung, aimed at keeping its search engine at the forefront for users globally.
The $20 billion annual payment from Google is a vital part of Apple’s Services business, which recorded $96.1 billion in sales in 2024. Amidst these developments, Apple’s stock remained relatively stable, closing the day roughly flat.
