Apple is mulling a plan to hurt Google where it hurts the most.
The iPhone maker is ramping up efforts for a significant overhaul of its Safari browser to better integrate AI-driven search tools, signaling a challenge to Google’s long-held dominance in the search engine market.
The revelation came from Eddy Cue, Apple’s senior vice president of services, during his testimony in the U.S. Justice Department’s antitrust lawsuit against Alphabet Inc.
At the center of the case is the companies’ estimated $20 billion-a-year agreement that designates Google as the default search engine on Apple’s browser.
A ruling against the deal could dismantle the long-standing arrangement, potentially reshaping how search functions on the iPhone and other Apple devices.
Apple takes a bite
Google pays Apple an estimated $20 billion a year to remain the default search engine on Safari—a lucrative arrangement that accounts for roughly 36 percent of the ad revenue Google earns through the browser, according to analysts.
But that dominant position may be at risk. As Google fends off rising competition from AI-driven players like OpenAI and Perplexity, Apple has already inked a deal to bring ChatGPT into Siri.
Meanwhile, Google is racing to finalize a separate agreement by mid-year to integrate its Gemini AI into Apple’s newest devices.
Alphabet shares tumbled 7.6 percent, erasing over $150 billion in market value, as Apple’s Eddy Cue cast a long shadow over the durability of the tech giants’ billion-dollar search partnership.
Cue’s testimony—that Safari searches declined for the first time last month amid rising user interest in AI tools—sent shivers down investor spines and Alphabet’s stock down the staircase.
Apple, too, felt the tremor, slipping about 2 percent, as markets digested the possibility that AI could rewrite the rules of the long-standing Google-Apple alliance.
AI search takes hold
According to the report, Cue said he expects AI-based search tools like OpenAI and Perplexity AI to ultimately supplant traditional search engines such as Google. He added that Apple plans to offer these AI-driven options within Safari going forward.
“We will add them to the list – they probably won’t be the default,” the report cited Cue as saying.
But, Google isn’t standing still. It has rolled out an “AI mode” on its search homepage in a bid to keep its massive user base from drifting toward rival AI platforms.
Last month, the search engine sought to calm nervous tech investors by highlighting that its AI investments are fueling growth in its core advertising business, after the company reported better-than-expected profit and revenue for the first quarter.
“The loss of exclusivity at Apple should have very severe consequences for Google even if there are no further measures,” D.A. Davidson analyst Gil Luria said.
“Many advertisers have all of their search advertising with Google because it is practically a monopoly with almost 90% share. If there were other viable alternatives for search, many advertisers could move much of their ad budgets away from Google to these other venues.”
