Alphabet's stocks plunge following Apple CEO's remark

Integration of AI search within Safari poses a potential threat to Google's billion-dollar deal with Apple, causing a stock price decrease for Alphabet, the Google parent company.

, and Administrator

2025 May 9 . 12:15 PM

2 min read

Apple mulls over introducing AI search within Safari, potentially jeopardizing a billion-dollar... — Apple mulls over introducing AI search within Safari, potentially jeopardizing a billion-dollar partnership with Google. This move sparked a steep decline in Alphabet's stock price, the corporation that oversees the dominant search engine online.

Alphabet's stocks plunge following Apple CEO's remark

Are you ready to dive into the tech world's latest scoop? Here's the lowdown on Apple and Google.

Apple's senior vice president of services, Eddy Cue, has dropped a bombshell. In a blow to Alphabet Inc., parent company of Google, Cue revealed that Apple is "actively considering" revamping its web browser Safari to focus on AI-powered search systems. Sounds like Apple is stepping up its game, right?

Cue believes that AI search providers like OpenAI, Perplexity, and Anthropic could eventually replace old-school search engines like Google. This revelation came during Cue's testimony in a federal court in Washington for a lawsuit brought by the U.S. Department of Justice against Alphabet.

The lawsuit revolves around Google's practice of funding platform providers, like Apple, to be the default search engine on their platforms, including iPhones and Macs. The $20 billion annual deal between the two tech titans has been under scrutiny and could lead to a severance of the longstanding alliance.

This potential separation between Apple and Google has sent investors into a tizzy. News of Cue's statements caused Alphabet shares to plummet by 7.3% on Wednesday, the sharpest drop since February. Apple shares also slid by 1.1% following Cue's comments.

But Google isn't throwing in the towel just yet. The search giant responded by stating that they've observed an increase in search queries from Apple devices.

It's important to note that while Apple is focusing on AI search options, it doesn't necessarily mean an immediate end to its partnership with Google. Cue clarified that AI options will likely serve as alternatives rather than replacements for Google as the default search option due to the substantial revenue implications of disrupting the status quo.

Sources:1. Michael Svetlov, Journalist2. Safari searches declining due to users switching to AI services like ChatGPT and Perplexity3. COVID-19 impact on AI search companies causing a shift towards AI-driven search functionalities4. U.S. Justice Department's lawsuit against Google highlighting the $20 billion deal between Apple and Google5. Eddy Cue emphasizing the revenue implications of changing the default search settings6. Apple cautious about making significant changes to the default search settings to preserve its financial relationship with Google.

Eddy Cue's revelation about integrating AI-powered search systems into Safari could potentially disrupt Google's dominance in the finance sector, as the $20 billion annual deal between Apple and Google could be at risk.
The federal court in Washington recently questioned Apple's practice of allowing Google to be the default search engine on its platforms as part of a lawsuit brought by the U.S. Department of Justice.
In response to Eddy Cue's statements, Google has been exploring the possibility of integrating technology for AI search providers within their business model to maintain its investing interests.
Businesses are keenly watching the developments between Apple and Google, as the ongoing lawsuit could lead to shifts in technology, finance, and even business partnerships.
While Apple is open to considering alternatives to Google as the default search option, they values the financial aspects of their longstanding partnership, suggesting a careful approach to implementing any changes.