Apple considers AI-powered alternatives in Safari, challenging Google’s search dominance.
AI platforms like OpenAI and Perplexity AI expand capabilities, also targeting Google’s search market.
Alphabet’s stock dropped over 7% amid concerns about Apple’s potential shift to AI search.
The long-reigning Goliath of information retrieval, Google, now finds itself bracing for ‘Search Wars 2.0,’ facing nimble AI-powered Davids and intensifying regulatory heat. Apple, with its billion-plus iPhone users, sits as a potential kingmaker, its decisions on Safari’s default search engine capable of redrawing the digital map. This battle unfolds as the Department of Justice scrutinizes Google’s market dominance.
Apple’s signal: The ground visibly shifted when Apple’s services chief, Eddy Cue, testified that Safari searches saw their first-ever decline in April 2025, a drop he attributed to users embracing AI tools. Apple is now “actively looking at” revamping Safari for AI-powered search, considering alternatives like OpenAI, Perplexity AI, and Anthropic. Cue noted, “Prior to AI, my feeling around this was, none of the others were valid choices. I think today there is much greater potential because there are new entrants attacking the problem in a different way.”
Regulatory pressure: Compounding Google’s challenge is the ongoing DOJ antitrust trial, which questions the legality of its estimated $20 billion annual payments to Apple to maintain its lucrative default search position. This scrutiny comes as Google reels from a separate April 17, 2025, federal court ruling that found it unlawfully monopolized key aspects of the digital advertising technology market. These legal entanglements create significant uncertainty around Google’s established business practices.
AI challengers rise: The AI threat is no longer theoretical, with platforms like OpenAI and Perplexity AI aggressively rolling out new capabilities. Both companies have recently integrated sophisticated shopping features into their AI search tools, aiming to capture product discovery queries directly. This move positions them as direct competitors to Google in a highly valuable search segment.
Market tremors: News of Apple’s potential pivot and Cue’s stark assessment sent Alphabet’s stock tumbling over 7%, wiping out roughly $150 billion in market value and signaling deep investor concern. While Google’s vast user base and brand recognition form a formidable defense, the landscape is undeniably changing. As Cue asserted, “AI is a new technology shift, and it’s creating new opportunities for new entrants.”
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