Shares of Google father or mother Alphabet Inc. tanked greater than 7% on Wednesday after a senior Apple govt signaled that the iPhone maker was taking a look at search engine options for its Safari net browser.
Eddie Cue, Apple’s senior vp of providers, testified on Wednesday as a part of the Justice Division’s antitrust lawsuit towards Google that Apple was “actively looking at” AI-powered search engines like google and yahoo which might exchange Google because the default choice on the iPhone and different units.
Alphabet shares had been just lately off greater than 9%, or $15.25, at $149.95.
Cue, who stories on to CEO Tim Cook dinner, testified in court docket on Wednesday that Apple has seen a lower within the variety of searches that had been performed by Safari customers — an rising variety of whom have migrated to AI, in keeping with Bloomberg.
Cue mentioned he expects synthetic intelligence-driven search platforms — corresponding to OpenAI’s ChatGPT, Perplexity AI and Anthropic — to ultimately supplant conventional search engines like google and yahoo like Google.
He added that Apple plans to combine these rising instruments as search choices inside Safari down the road.
“We’ll include them in the lineup — though they likely won’t be set as the default,” he mentioned, noting that the providers nonetheless want refinement.
Cue confirmed that Apple has held preliminary talks with Perplexity.
“Before AI came into play, I didn’t see any of the alternatives as serious contenders,” he mentioned.
“But I think the landscape is changing. There’s now real potential thanks to new players approaching the challenge with fresh perspectives.”
Apple presently integrates ChatGPT as a function inside Siri and is predicted to introduce Google’s Gemini — its AI-powered search software — someday later this 12 months.
In line with Cue, Apple additionally evaluated AI choices from Anthropic, Perplexity, DeepSeek and Elon Musk’s Grok in the course of the course of.
Cue emphasised that the cope with OpenAI doesn’t restrict Apple’s flexibility, saying it “allows [Apple] to add other AI providers into the company’s operating system, including its own.”
Cue revealed that earlier than ChatGPT was chosen to energy Apple Intelligence in iOS 18, the corporate had evaluated a number of contenders — together with Google.
He described the method as a “bake-off” and mentioned Google submitted a time period sheet that included “a lot of things Apple wouldn’t agree to and didn’t agree to with OpenAI.”
Cue emphasised that the fast tempo of innovation in expertise may ultimately render even immediately’s most important units out of date.
“You may not need an iPhone 10 years from now as crazy as it sounds,” he mentioned.
“The only way you truly have true competition is when you have technology shifts. Technology shifts create these opportunities. AI is a new technology shift, and it’s creating new opportunities for new entrants.”
He additionally famous that for AI platforms to stay aggressive, they’ll have to considerably improve their search indexes.
Nonetheless, even when that progress is gradual, he believes the benefits of AI-driven instruments might already be sufficient to entice customers.
“There’s enough money now, enough large players, that I don’t see how it doesn’t happen,” Cue mentioned, referring to a broader transfer away from conventional search engines like google and yahoo towards AI options.
Alphabet’s inventory dropped by as a lot as 7% on Wednesday, serving to to tug the broader market downward.
Apple additionally took a success, falling as much as 2.5% following Cue’s testimony.
The S&P 500 Index, which had been up greater than 0.5% earlier within the day, briefly turned destructive.
In 2022, Google paid Apple $20 billion to stay the default search engine on Safari throughout iPhones, iPads and Macs.
This determine was disclosed in court docket paperwork in the course of the Justice Division’s antitrust lawsuit towards Google, marking the primary public affirmation of the cost quantity.
The settlement between Google and Apple has been a focus within the DOJ’s case, which alleges that Google’s substantial funds to safe default search engine standing on varied platforms have contributed to its dominance within the search market.
The DOJ contends that such preparations hinder competitors by making it difficult for rival search engines like google and yahoo to realize visibility and market share.
The Submit has sought remark from Alphabet.
