Apple is “actively looking at” reshaping the Safari web browser on its devices to focus on AI-powered search engines, Bloomberg News reported on Wednesday, a move that could chip away at Google’s dominance in the lucrative search market.
Apple executive Eddy Cue testified in the U.S. Justice Department’s antitrust case against Alphabet, saying searches on Safari fell for the first time last month, which he attributed to users increasingly turning to AI, according to the report.
Google is the default search engine on Apple’s browser, a coveted position for which it pays Apple roughly $20 billion annually, or about 36% of its search advertising revenue generated through the Safari browser, analysts have estimated.
Losing that position could heap pressure on Google just as it faces fierce competition from AI startups such as OpenAI and Perplexity. Apple has already struck a deal with OpenAI to offer ChatGPT as an option in Siri, while Google is trying to secure an agreement by mid-year to embed its Gemini AI technology in Apple’s latest devices.
Alphabet shares fell 6%, while Apple was down about 2%. Both companies and the DoJ did not respond to Reuters’ requests for comment.
Cue said he believes AI search providers, including OpenAI and Perplexity AI, will eventually replace standard search engines such as Google, and that Apple will add those players as options in Safari in the future, according to the report.
“We will add them to the list – they probably won’t be the default,” Bloomberg News cited Cue as saying.
Last month, Google reassured jittery tech investors that its AI investments were powering returns at its crucial ad business after its first-quarter profit and revenue beat expectations.
“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.”
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