Apple’s Stock Price Falls After Exec Says It Is Considering Injecting Safari With AI

On Wednesday, Apple’s senior vice president of services, Eddy Cue, said that the company is “actively looking at” bringing AI search options to its Safari web browser. Cue also said he believes that AI search engines will eventually replace standard search engines like Google. Cue’s comments came as he testified in the remedies phase of Google’s antitrust trial in Washington.

The Apple executive also shared that the number of Google searches made on Safari decreased for the first time ever this year. He attributed the change to the rise of AI search engines. “That has never happened in 22 years,” he emphasized. (Safari was released in early 2003.) While Cue says that AI search technology isn’t ready to be rolled out on Safari (“To date, they’re just not good enough”), he did say that the company has already had conversations with OpenAI, Perplexity, and Anthropic.

Last August, Apple announced a partnership with OpenAI to bring ChatGPT to some of its products, but Cue says he wanted to “make sure we have the capability to switch if we have to,” in case another company distinguishes itself as a leader in AI search.

Share prices of both Alphabet and Apple fell—Alphabet’s by around 8% and Apple’s by around 2%—after Bloomberg reported on Cue’s testimony.

Executives from a range of tech companies—including Yahoo, Microsoft, and OpenAI—are expected to testify during the remedies phase of this trial, which kicked off last month. Apple’s testimony is particularly relevant to Google’s fate because the search company pays Apple around $20 billion a year to be the default search engine on Safari. Under this agreement with Google, Apple receives a portion of Google’s ad revenue from searches on Safari. During his testimony on Wednesday, Cue said he’s “lost a lot of sleep” over the idea of losing the revenue share.

Google is currently the defendant in two separate antitrust suits filed by the Department of Justice. Today’s testimony was part of the trial that emerged from the Justice Department’s 2020 lawsuit against Google. That suit alleges that Google illegally maintained a monopoly on search and search advertising markets. A central argument in the DOJ’s case was that the exclusivity agreements Google struck with certain platform providers (like Apple) to become the default browser on their tools were illegally monopolistic.

Last August, Judge Amit P. Mehta of the US District Court of the District of Washington, DC, ruled against Google in the trial. While Google has said it plans to appeal the verdict, that action will have to wait until the remedies phase of the trial is complete.

Separately, a 2023 suit filed by the DOJ against Google argues that the search giant illegally monopolized the digital ad tech market. Last month, Google was found guilty of two of the three charges brought against it. Google also plans to appeal this ruling.