Apple’s AI Search Plans Threaten Google’s Safari Dominance
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Apple is preparing to introduce AI-powered search options to its Safari browser, posing a major threat to Google’s dominance in online search and advertising.
The move could disrupt Google’s lucrative position as the default search engine on Apple devices, a deal estimated to be worth about USD 20 billion annually.
Shares of Google-parent Alphabet dropped 7.3% following the news, erasing approximately USD 150 billion from its market value. Apple shares also fell, closing down 1.1%.
Apple Senior Vice President Eddy Cue revealed during a U.S. antitrust trial that Safari searches declined last month as users increasingly turned to AI tools.
Cue said Apple is actively exploring changes to Safari, including adding AI search providers such as OpenAI and Perplexity AI.
Google responded by stating that it continues to see growth in total search queries, including those from Apple devices, citing voice and visual search as key drivers.
However, Cue’s comments suggest a significant shift in user behaviour, potentially undermining Google’s core advertising business, which is already under scrutiny from U.S. regulators.
The U.S. Justice Department has proposed banning Google from paying companies to be the default search engine as part of its antitrust remedies.
Analysts warn that losing exclusivity on Apple devices could have severe consequences for Google, which holds nearly 90% of the search market.
D.A. Davidson analyst Gil Luria said advertisers might shift budgets away from Google if viable alternatives emerge.
Despite setbacks, Google has invested heavily in AI, launching an “AI mode” on its search page and expanding AI Overviews to over 100 countries.
The company has also added advertisements to AI Overviews to boost search ad revenue.
Google CEO Sundar Pichai testified last month that the company hopes to finalise a deal with Apple by midyear to integrate its Gemini AI technology into new iPhones.
Apple’s plans highlight the growing influence of generative AI search platforms like ChatGPT and Perplexity, which are gaining traction among users.
ChatGPT reported over 1 billion weekly web searches in April and had more than 400 million weekly active users as of February.
Apple plans to add AI search options to Safari, challenging Google’s dominance
Alphabet shares fell 7.3%, losing about USD 150 billion in market value
Google pays Apple around USD 20 billion annually to remain Safari’s default search engine
Source: REUTERS