Apple and Google investors are growing increasingly concerned about the rise of AI-driven search engines, especially as platforms like OpenAI’s ChatGPT gain traction. A recent report by Seeking Alpha revealed that Google’s stock declined by 8% last week following testimony from Apple’s Senior Vice President of Services, Eddy Cue. Speaking during a Justice Department lawsuit against Google, Cue stated that the number of searches conducted via Google in Apple’s Safari browser had declined for the first time.
Cue also mentioned that Apple is evaluating the possibility of integrating other AI search engines like Perplexity into Safari, which could significantly reduce Google’s dominance. Currently, Google benefits from a lucrative revenue-sharing deal with Apple that brought in $20 billion for Apple in 2022. Cue’s comments sparked major investor reaction, leading to an estimated $150 billion drop in Google’s market value, while Apple shares also saw a 1% decline.
Industry analysts argue that the growing reliance on AI search presents risks for both companies. Dilantha De Silva noted that although some users may not prioritize AI search features now, consumer expectations are shifting, and Apple must adapt to the evolving landscape. While Alphabet, Google’s parent company, is reportedly discussing integrating its Gemini AI assistant with Apple’s Siri, it may no longer enjoy its longstanding “default” status on iPhones.
Meanwhile, OpenAI is expanding beyond its role as a model developer and aiming to build a strong consumer platform. The company recently hired Instacart CEO Fidji Simo to lead its applications division, a move seen as an effort to directly engage consumers. Julia Huang, a partner at Vesey Ventures, commented that OpenAI’s ambition to own the consumer experience is evident, especially in the search space, where users are increasingly turning to AI chatbots. Huang suggested this could lead to AI closing the loop from search to transaction, posing a direct challenge to Google’s dominance in the space.
