https://x.com/markgurman/status/1920295801047195690
Google shares tumbled on Wednesday after Apple executive Eddy Cue suggested that AI-powered search engines could eventually replace traditional ones like Google. Cue made these comments during his testimony in the U.S. Department of Justice’s lawsuit against Alphabet, Google’s parent company. According to Cue, Apple has been in discussions with AI companies like Perplexity AI, Anthropic, and OpenAI to potentially integrate their services into Apple’s Safari browser.
https://x.com/markgurman/status/1920138158114787751
He noted that searches on Safari have already started to decline, which he attributed to the growing use of AI. This news sent shockwaves through the market, with Alphabet’s stock plunging by 9% and Apple’s shares sliding by 2%. The potential shift towards AI-based search poses a significant threat to Google’s dominance in the search engine market.
Google currently pays Apple an estimated $20 billion per year to be the default search engine on Safari.
https://x.com/danprimack/status/1920161972924133395
Apple’s AI search engine talks
In addition to this payment, Apple also receives a portion of Google’s ad revenue generated through searches on the browser.
A move away from Google as the default search engine could have major financial implications for both companies. The Justice Department’s ongoing lawsuit against Alphabet alleges that Google has illegally monopolized the advertising technology market. The court is now in the process of determining appropriate penalties after previously ruling against Google.
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As part of his testimony, Cue expressed his belief that Google should remain Safari’s default search option, citing concerns about the potential loss of revenue from the arrangement between the two tech giants. The rapid advancements in artificial intelligence and the growing popularity of AI-based search alternatives have put additional pressure on Alphabet’s lucrative advertising business. These developments suggest a potential shift in the internet search landscape, with AI technologies poised to disrupt traditional search engines.
Investors and industry experts will be closely monitoring the adoption rates of AI-powered search options, as well as any changes in the financial agreements between Apple and Google, to gauge the long-term impact of this emerging trend on the search engine market.
