Apple’s plans to integrate AI-powered search options into its Safari browser present a significant challenge to Google, whose advertising business is heavily reliant on iPhone users engaging with its search engine.
The announcement sent shockwaves through the market, with shares of Google-parent Alphabet dropping 7.3%, reducing its market value by approximately $150 billion.
Apple is exploring changes to Safari, with executive Eddy Cue revealing that searches on the browser declined for the first time last month as users increasingly turn to AI-driven search alternatives. In response, Google acknowledged continued growth in search queries, including those originating from Apple’s devices.
However, Apple’s move to introduce AI-driven search options indicates a potential disruption to Google’s dominant position in the search market.
Currently, Google pays Apple around $20 billion annually to maintain its position as the default search engine on Safari, a critical revenue stream for both companies. This arrangement could face scrutiny from antitrust regulators, who have proposed measures to dismantle Google’s dominance in the search space.
In addition to its ongoing search innovations, including the introduction of AI features, Google is reportedly in talks with Apple to include its Gemini AI technology on upcoming devices. Meanwhile, Apple is preparing to offer a range of AI search options, including alternatives like OpenAI and Perplexity AI, further diversifying its search landscape.
