Apple’s move to integrate AI-powered search tools into its Safari browser is seen as a significant challenge to Google’s long-standing dominance in the search market, especially since a large portion of Google’s advertising revenue depends on iPhone users conducting searches through its engine.
Following the news, shares of Google’s parent company Alphabet fell sharply by 7.3%, erasing around $150 billion in market value. A Reuters source revealed that Apple executive Eddy Cue, while testifying during an antitrust case, confirmed that Apple is seriously considering a revamp of Safari. Cue also noted that for the first time, searches via Safari declined last month as users increasingly relied on AI tools for information.
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Despite Google claiming overall growth in search volumes — including on Apple devices — the shift in user behavior signaled by Cue suggests a potential disruption to Google’s core business. The development is especially important given that Google currently pays Apple an estimated $20 billion annually to remain Safari’s default search engine, accounting for a sizable share of Google’s ad revenue generated via Apple devices.
U.S. antitrust authorities have targeted this type of exclusive arrangement as anti-competitive, proposing that such deals be prohibited to level the playing field. Analysts believe losing this default status on Safari could be deeply damaging for Google, as it may prompt advertisers to diversify their spending away from Google’s platform, which now holds nearly 90% of the market share in search advertising.
Still, Google has been bolstering its AI capabilities. Despite initial concerns that it was lagging in the AI race following ChatGPT’s emergence, Google has expanded its AI offerings, including “AI Overviews” on search pages and voice/visual search capabilities. These updates are intended to retain users and attract more advertisers.
Google CEO Sundar Pichai recently testified that the company is in talks with Apple to potentially bring its Gemini AI onto future iPhones. Meanwhile, Apple is reportedly planning to add other AI search options like OpenAI and Perplexity AI to Safari, reflecting the growing strength of generative AI platforms.
With platforms like ChatGPT now handling over 1 billion weekly searches and boasting more than 400 million active users, the competition in AI-driven search is heating up — posing a real threat to Google’s dominant position.
