Apple’s Strategy to Introduce AI Search on Safari Challenges Google’s Dominance – One America News Network
By Aditya Soni and Jody Godoy
May 7, 2025 – 10:06 PM PDT
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(Reuters) – Apple is set to introduce AI-enhanced search capabilities in its Safari browser, a significant challenge for Google, which heavily relies on iPhone users for its advertising revenue.
As a result, shares of Google’s parent company, Alphabet (GOOGL.O), plunged 7.3%, eliminating approximately $150 billion from its market capitalization.
A source informed Reuters that Apple is “actively exploring” updates to Safari, particularly highlighted by executive Eddy Cue’s testimony in an antitrust hearing regarding Google’s market dominance in online search.
Cue indicated that Safari experienced a decline in searches last month for the first time, as users increasingly shift toward AI solutions. Apple’s stock fell by 1.1% following the news.
In a blog statement, Google maintained that it still observes growth in overall search queries, including those originating from Apple’s platforms.
“Users find Google Search increasingly beneficial for a wider range of queries, utilizing it for new needs and in innovative ways,” the company stated.
Google pointed to the growth of voice and visual search functionalities as key drivers of overall search volume increases. It remains uncertain if Cue based his testimony on the same types of search comparisons.
Nonetheless, Cue’s remarks imply a potential transformative shift in search, posing a threat to Google’s predominance in the search market—a crucial advertising hub now encountering scrutiny from U.S. antitrust regulators, who have filed two major lawsuits against the tech giant.
Google serves as the default search engine on Apple’s browser, an advantageous position for which it reportedly pays Apple about $20 billion annually, roughly 36% of its search ad revenue generated through Safari, according to analysts.
The U.S. Justice Department has suggested prohibiting Google from compensating companies to maintain its status as the default search engine as a potential remedy to curtail its online search dominance.
A person walks by the Apple store on Fifth Avenue in New York.
A person walks by the Apple store on Fifth Avenue in New York City, U.S., May 1, 2025. REUTERS/Kylie Cooper/File Photo Purchase Licensing Rights.
“The end of exclusivity with Apple could have profound ramifications for Google, even without additional actions,” stated D.A. Davidson analyst Gil Luria.
“Numerous advertisers rely entirely on Google for search advertising due to its near-monopoly, capturing almost 90% of the market. If viable alternatives emerged, many advertisers might reallocate significant portions of their budgets away from Google,” Luria noted.
However, Google is not without its defenses.
Despite being perceived as trailing in the AI race after ChatGPT’s notable debut in late 2022, Google has committed substantial resources to its AI initiatives and is leveraging its extensive data repository.
Earlier this year, it introduced an “AI mode” on its search page, aiming to retain users amid competition from various AI platforms.
Recently, it expanded AI Overviews—summaries displayed above traditional hyperlink results for search queries—across over 100 countries, also incorporating advertisements to bolster Search ad revenues.
CEO Sundar Pichai mentioned in testimony during the antitrust trial last month that Google seeks a mid-year agreement with Apple to incorporate its Gemini AI technology into new devices.
Cue also remarked on Wednesday that Apple plans to include AI search providers like OpenAI and Perplexity AI among its future search options, as reported by Bloomberg.
“(Apple’s initiative) demonstrates the advancements made by generative search platforms such as ChatGPT and Perplexity,” stated Yory Wurmser, principal analyst for advertising, media, and technology at eMarketer.
Wurmser added that Google’s substantial investments to maintain its default search engine status underscore the significance of these agreements.
For instance, ChatGPT reported over 1 billion weekly web searches for its search capabilities as of April, boasting more than 400 million active users weekly as of February.
Reporting by Jody Godoy in Washington, Kenrick Cai in San Francisco, Arsheeya Bajwa and Aditya Soni in Bengaluru; Additional reporting by Deborah Sophia; Editing by Sayantani Ghosh, Arun Koyyur, Anil D’Silva and Jacqueline Wong
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