Apple exec sends Google shares plunging as he calls AI the new search

Eddy Cue tells DC court Safari to rope in Anthropic, OpenAI and co

Updated An Apple executive's backhanded endorsement of AI as a replacement for traditional internet searches has sent Google stock tumbling. 

Apple senior vice president of services Eddy Cue made a number of interesting statements about the future of AI, and its potential impact on Google's bottom line, during testimony Wednesday in the remedies phase of the US Department of Justice's lawsuit against Google parent Alphabet. That's the lawsuit that resulted in a judge ruling that Google's payments to make its search engine the default for smartphone browsers and elsewhere broke American antitrust law.

We will add them to the list - they probably won't be the default

Alphabet shareholders were shaken by Cue's statements, as reported by Bloomberg, that he saw AI likely replacing traditional search engines like Google in coming years. As part of that expectation, Cue also noted that Apple intended to make changes to Safari to place AI-driven search alongside traditional web search, with tools from OpenAI, Perplexity, and Anthropic all likely to be added to Safari as search options in future updates. 

"We will add them to the list - they probably won't be the default," Cue reportedly said in his testimony – they being the AI upstarts – adding that he didn't believe anyone was able to compete with Google as a default search service prior to the AI age. 

Cue also attributed a first-time drop in Safari searches to AI's growing influence as a search engine alternative. 

Along with his contention that Google's days as the de facto king of search were short, Cue also revealed that Google had competed with OpenAI for a place in Apple Intelligence, the AI features Apple introduced in iOS 18 that have been less than successful for the company. Google's terms for its inclusion over ChatGPT reportedly included "a lot of things Apple wouldn't agree to and didn't agree to with OpenAI," Cue said. ChatGPT is now available as an option for Siri searches. 

Cue still noted that AI firms needed to improve their search indexes if they truly want to beat Google at its own game, but he noted that he expected it to happen eventually, whether Google liked it or not. 

Shares of Alphabet dropped considerably following Cue's testimony, and closed down more than 7 percent for the day. Google is not exactly ignoring AI search - AI overviews are now front-and-center of Google search result pages, and Google even offers an experimental all-AI search experience as well - but the threat of Google's unchallenged search dominance ending was enough to spook investors.

Cue's testimony came as part of the lawsuit that found Google guilty of monopolizing web search on mobile devices last year, with Apple and its multi-billion dollar deal with Google to make it the default search engine on iPhones being a large part of the case. In one sense, Cue's Wednesday testimony actually helped Google, suggesting that strict antitrust remedies aren't necessary because Google's dominance will eventually be undercut by technological evolution.

The guilty verdict came down last year, and now Washington, DC District Court judge Amit Mehta is overseeing a trial to determine what penalty to impose on the Chocolate Factory. The DoJ - both Biden's and Trump's - have asked Mehta to force Google to divest Chrome and bar it from paying to be a default search engine on mobile devices. 

Mehta's decision on Google's future is expected to be issued by August. Neither Google nor Apple responded to questions for this story. ®

Updated to add at 0200 UTC, May 8

Google seems keen to downplay any concerns about its future as king of the web search world.

"We continue to see overall query growth in Search," the Chrome goliath said in a statement. "That includes an increase in total queries coming from Apple’s devices and platforms.

"More generally, as we enhance Search with new features, people are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways, whether from browsers or the Google app, using their voice or Google Lens."