Google Parent Alphabet Shares Fall After Apple Executive Talks AI-Powered Search Options

Google's parent company, Alphabet, experienced an over 8% decline in shares following comments from Apple's executive, Eddy Cue, about considering artificial intelligence-driven search features for Safari browser. This move could potentially challenge Google's dominant position in the lucrative search market.

At 2:52 PM ET, Google's shares were down by 8.8%, erasing over $150 billion from Alphabet's market value. Cue's remarks about a potential shift in search preferences towards AI on Safari caused a similar decline in Apple's stock.

What Did Eddy Cue Testify?

During his testimony, Cue mentioned a decrease in Safari searches due to growing AI usage. He expressed belief in AI search providers like OpenAI and Perplexity AI eventually replacing traditional search engines such as Google. Cue also hinted at Apple including these players as search options in Safari.

The potential change in Apple's approach could reshape the search landscape, given its large user base of around 2.5 billion devices. Google, facing rising competition from AI startups like OpenAI and Perplexity AI, is seeking to embed its Gemini AI technology in Apple's latest devices, while Apple has already partnered with OpenAI to integrate ChatGPT in Siri.

Reports suggest any alterations in Apple's strategy could have substantial consequences for Google, a nearly monopolistic force in the search advertising market. Analysts estimate that a loss of exclusivity with Apple might prompt advertisers to divert their ad budgets away from Google to explore other search alternatives, potentially disrupting Google's market share dominance.