Alphabet stock took a sharp hit on Wednesday, dropping over 8% in a single trading session after Apple’s top services executive, Eddy Cue, made a bold prediction: AI search engines are likely to replace traditional search tools like Google.
Cue’s remarks came during a federal court testimony in Washington, D.C., where he was addressing the Justice Department’s ongoing antitrust case against Alphabet. He revealed that Apple is actively exploring partnerships with AI-driven search providers such as OpenAI, Perplexity, and Anthropic, and plans to incorporate them into the Safari browser. That would mean users could soon choose to search the web using AI instead of defaulting to Google.
“Searches in Safari actually declined for the first time in April,” Cue said, attributing the dip to a growing preference for AI assistants over standard search queries.
The implications for Google’s parent company, Alphabet, are massive. Google has long held a lucrative agreement with Apple, paying an estimated $20 billion annually to remain the default search engine across Apple devices. That deal is a cornerstone of Alphabet’s advertising business, which is heavily reliant on default search traffic.
Cue didn’t mince words about the pressure he feels over potentially losing that revenue stream. “I’ve lost sleep over it,” he admitted, calling the relationship with Google financially significant for Apple – but no longer untouchable.
The Justice Department’s antitrust case is focused on whether Alphabet used its dominant position in the search and advertising markets to stifle competition. While the court has already ruled that Google’s ad tech practices violated antitrust laws, it is now considering remedies, including a possible breakup or restrictions on exclusive deals like the one it has with Apple.
The idea that Apple may allow users to choose between Google, OpenAI’s ChatGPT, or other AI tools directly from Safari has spooked investors. Alphabet stock (GOOGL) fell from $130.14 to $118.98 by market close, wiping billions from its market cap. Apple shares also slipped, though by a smaller margin of just under 2%.
This sudden shift in the search engine landscape is happening as user behavior increasingly tilts toward AI. Whether it’s asking ChatGPT for quick answers or using Perplexity AI for real-time information retrieval, consumers are already testing the limits of what AI can do – often bypassing traditional search engines in the process.
Meanwhile, Google is also investing heavily in AI, rolling out features like AI Overviews in its search results and testing its Gemini AI across multiple platforms. But as Cue’s comments suggest, those efforts may not be enough to maintain dominance if major distribution channels like Safari turn elsewhere.
If Apple does eventually offer users AI alternatives by default, it could mark the beginning of the end for Google’s monopoly on mobile search – a tectonic shift in the tech ecosystem.
