Apple’s AI search plan wipes $125 billion from Google
Alphabet’s market value fell by 7.3% overnight, after Apple revealed plans to integrate AI search into its Safari browser and iPhones.
At Google’s antitrust trial on Wednesday, Apple’s head of services Eddy Cue said the company had begun talks with Perplexity about adding its AI search functions into Safari and iPhones.
Cue also revealed that search queries in Safari dropped in April, for the first time in 20 years, as users flocked to AI search.
The news wiped around $125 billion (A$195b) from the market value of Alphabet, and also saw Apple shares drop a modest 1.5%.
Google is the default search engine on Safari, for which it pays Apple $20 billion (A$31b) a year – which Reuters estimates amounts to around 36% of search advertising revenue it makes through the Safari browser.
Last year, Apple announced a deal with OpenAI where ChatGPT would be integrated within Apple’s operating systems across iPad, iPhone, and Macs.
Cue’s comments have sparked fears that Google’s days as the search engine king may be limited.
Alphabet’s 2024 annual report signalled this danger, warning: “Other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to develop and/or deploy.”
Eddy Cue
Despite Cue’s warning, the courts seem to view Google’s search dominance as monopolistic.
In August, 2024, a US federal judge ruled Google violated antitrust laws with its search. “Google is a monopolist, and it has acted as one to maintain its monopoly,” US District Judge Amit Mehta wrote. One solution would be to block deals such as the one Alphabet has with Apple.
According to Cue, any talk of market dominance in technology is overstated.
“When I got to Silicon Valley, all of the best companies, or the most successful companies, either don’t exist today or are significantly smaller and less impactful,” Cue said, naming HP and Intel as examples.
He also warned that the shifting nature of technology means that people “may not need an iPhone 10 years from now”, adding: “We’re not an oil company, we’re not toothpaste. These are things that are going to last forever.”
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