Alphabet’s shares sinks 7% on Wednesday after Apple’s Eddy Cue, senior vice president of services, made a bold statement about the future of search engines. Cue testified in a U.S. federal court that AI-powered search tools could eventually replace traditional search engines like Google, sending shockwaves through the tech industry.
The remarks came amid the Justice Department’s antitrust lawsuit against Alphabet, which scrutinizes Google’s dominance in online search and advertising. Cue revealed that Apple is actively exploring AI-driven search alternatives, including OpenAI, Perplexity, and Anthropic, as potential options for its Safari browser.
next read, Will Apple fullfil AI promises with iPhone 17 launch?
This has raised concerns about Google’s long-standing partnership with Apple, where the search giant reportedly pays Apple billions annually—up to $20 billion in 2022—to remain the default search engine on across apple products.
Investors reacted swiftly to the news, wiping out approximately $150 billion from Alphabet’s market capitalization. Apple’s stock also dipped 2%, reflecting broader uncertainty about the evolving search landscape.
Cue’s testimony highlighted a significant trend: Safari searches declined for the first time in April, a shift he attributed to the growing popularity of AI chatbots. This decline raises questions about Google’s future in an AI-driven world, where users increasingly turn to chatbots and AI assistants for information.
Despite the market responds, Alphabet defended its position, stating that overall search queries—including those from Apple devices—continue to grow. Analysts remain divided on the long-term impact, with some arguing that AI-powered search won’t immediately disrupt Google’s lucrative advertising business.