Apple’s AI Safari Search Ambitions Threaten Google’s Dominance
Apple’s move to integrate AI-driven search options into its Safari browser poses a major challenge to Google, whose advertising empire heavily relies on iPhone users utilizing its search engine. The announcement dealt a heavy blow to Alphabet, Google’s parent company, whose shares dropped by 7.3 percent, resulting in a loss of around $150 billion in market value.
According to a source familiar with the matter, Apple is seriously considering a revamp of Safari. The update came during testimony by Apple executive Eddy Cue in an ongoing antitrust case concerning Google’s dominance in online search. Cue reportedly mentioned that Safari search traffic had declined for the first time last month as users increasingly turned to AI tools for information. Apple’s shares also took a hit, closing down by 1.1 percent.
Despite this, Google stated that it continues to experience growth in overall search queries, including those coming from Apple devices. In a blog post, the company highlighted that users are finding Google Search more useful and are interacting with it in new ways, such as through voice and visual searches. It remains unclear whether Cue was comparing the same categories of search traffic during his testimony. Nevertheless, his comments hint at a potentially significant shift in user behavior that could threaten Google’s core search business. This is especially concerning as Google faces heightened scrutiny from U.S. regulators, who have filed two major antitrust lawsuits against the company.
Currently, Google remains the default search engine on Safari, a highly valuable position for which it reportedly pays Apple approximately $20 billion annually. Analysts estimate that this accounts for about 36 percent of Google’s search advertising revenue generated through the Safari browser.
One of the remedies proposed by the U.S. Justice Department is to ban such exclusive arrangements. D.A. Davidson analyst Gil Luria remarked that losing default status on Apple devices could have serious consequences for Google, even without additional regulatory actions. Many advertisers concentrate their search ad spending with Google due to its near-monopoly status. If viable alternatives emerge, advertisers may begin shifting their budgets elsewhere.
Google, however, is not without resources. Though initially perceived as falling behind in the AI race after the release of ChatGPT in 2022, the company has made significant investments in AI and has leveraged its massive data assets. Earlier this year, it introduced an "AI mode" on its search platform to retain users and prevent them from turning to competitors. Google also expanded its AI Overviews feature, which presents summaries above traditional search results, to users in over 100 countries and has started incorporating advertisements into these summaries to boost ad revenue.
During a separate antitrust trial last month, Google CEO Sundar Pichai expressed hopes of reaching an agreement with Apple by mid-year to integrate its Gemini AI technology into upcoming iPhones.
On the other hand, Cue revealed that Apple plans to introduce alternative AI search providers such as OpenAI and Perplexity AI into Safari’s search options, as reported by Bloomberg. Yory Wurmser, principal analyst at eMarketer, noted that this move reflects the rapid progress of generative search platforms like ChatGPT and Perplexity. He emphasized that Google’s willingness to pay tens of billions of dollars to retain its default status underscores how critical these deals are to its business.
For example, ChatGPT reported over one billion weekly search queries in April and had more than 400 million active users each week as of February.
Found this article interesting? Follow us on X(Twitter) ,Threads and FaceBook to read more exclusive content we post.
