AI search feature in Apple's Safari threatens Google's dominance

Published: 2025-05-08 20:01:16 ET AAPL

Published on 05/08/2025 at 20:01

Key takeaways

Apple's integration of AI-driven search options into its Safari browser poses a significant challenge to Google's dominance in the search market. This move, which came to light during an antitrust case against Google, caused Alphabet's shares to plummet, losing about $150 billion of their market value. According to Eddy Cue, Apple's senior vice president, searches on Safari fell for the first time last month as users increasingly opted for AI-driven search experiences. Although Google maintains that the overall volume of searches is increasing, including those coming from Apple devices, Cue's statement suggests that a fundamental shift in search behavior is underway.

Advertising revenue will decline in Google's monopoly

This potential disruption threatens Google's lucrative advertising business, which relies heavily on iPhone users' use of its search engine. The company currently pays Apple an estimated $20 billion a year to be the default search engine in Safari. U.S. competition authorities are investigating this deal and are proposing measures to dismantle Google's dominance in online search.

Analysts warn that the loss of exclusivity on Apple devices could have serious consequences for Google. Many advertisers rely solely on Google because of its near-monopoly position, with an estimated 90 percent market share. The emergence of viable alternatives could prompt advertisers to shift their budgets away from Google.

Trend of AI search

Despite initially being seen as a laggard in the AI race, Google has invested heavily in its own AI initiatives. The company introduced an "AI mode" on its search page and expanded AI listings, aiming to retain users who might be tempted by rival AI models. In addition, Google is exploring a partnership with Apple to integrate its Gemini AI technology into new iPhones.

This development highlights the crucial role standard search engine agreements play in Google's business model, as evidenced by the billions the company invests annually to maintain its position. ChatGPT's success, with more than a billion weekly searches and 400 million active users, is a further example of the transformative potential of AI-driven search.

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