The long-simmering question of whether artificial intelligence could truly disrupt Google’s search dominance ignited investor fears on Wednesday, sending Alphabet Inc.’s stock tumbling after a high-ranking Apple executive testified that AI usage is already cutting into traditional search activity on iPhones.
Apple exec points to AI impact on search volume
Testifying during the ongoing federal antitrust trial against Google’s parent company, Alphabet, Apple’s Eddy Cue delivered a potentially damaging assessment.
He revealed that searches conducted via Apple’s Safari browser – a major gateway to Google for millions – experienced their first-ever decline in volume in April.
Cue directly attributed this unprecedented dip to users increasingly turning to AI engines instead of traditional search to find answers.
Cue’s testimony carries significant weight given the context.
Apple receives substantial payments from Google, reportedly exceeding $20 billion annually, to maintain Google as the default search engine on Apple devices like the iPhone and iPad.
This lucrative arrangement is central to the Justice Department’s antitrust case against Google.
Adding further pressure, Cue also suggested Apple would likely incorporate AI engines as search alternatives on its devices over time, according to Bloomberg reports on his testimony.
Validating fears, fueling AI bets
This disclosure from a key Google partner appears to validate a core fear that has hovered over Google since AI chatbots like OpenAI’s ChatGPT exploded onto the scene in 2022: that AI could fundamentally erode Google’s highly profitable search empire.
It neatly explains the massive influx of venture capital into AI startups, as investors bet these new technologies can carve out significant market share from Google, whose search dominance underpins its $2 trillion valuation.
The prospect of AI disruption is precisely what has spurred Google itself to aggressively integrate AI into its own services, transforming conventional searches into conversational queries answered by its Gemini AI engine through features like AI Overviews.
Despite early, sometimes mocked, missteps (infamously including suggesting glue on pizza), Google has consistently maintained that users appreciate the AI-enhanced results.
Contrasting narratives: Google vs. Apple testimony
During Alphabet’s earnings call last month, CEO Sundar Pichai presented an optimistic view, claiming Google’s AI features were actually boosting engagement.
“Nearly a year after we launched AI Overviews in the US, we continue to see that usage growth is increasing as people learn that Search is more useful for more of their queries,” Pichai told analysts at the time.
Cue’s sworn testimony on Wednesday directly challenges that narrative, suggesting Google’s efforts haven’t fully insulated its core market from the AI shift.
The market reaction was swift and negative, with Google shares falling more than 7% following the news.
Google pushes back
Late Wednesday, Google issued a statement disputing Cue’s assertion.
The company stated it continues to see “overall query growth in search,” specifically adding, “That includes an increase in total queries coming from Apple’s devices and platforms.”
The conflicting statements from two deeply intertwined technology giants highlight the high stakes involved as AI continues to reshape how users seek and consume information online, posing a potentially existential challenge to Google’s long-held dominance in search.
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