GOOGL, APPL: Apple’s A.I Search Breaks Google

Apple ’s intentions to incorporate AI-powered search capabilities into its Safari browser are a serious setback for Google , whose profitable advertising business heavily depends on iPhone users accessing its search engine. The news caused Alphabet to close down 7.3 percent, removing about $150 billion from its market value. A source familiar with the situation told Reuters that the iPhone manufacturer was “actively looking at” changing Safari. The source cited Apple executive Eddy Cue, who was testifying on Wednesday regarding an antitrust case concerning Google’s hegemony in online search. According to the source, Cue claimed that users’ growing reliance on AI was why Safari searches decreased for the first time last month. Apple’s stock ended the day down 1.1 percent. “Total queries coming from Apple’s devices and platforms,” according to a statement on the company’s blog, showed that Google was still seeing an increase in the total number of search queries. The company wrote, “People are accessing Google Search for new things and in new ways, and they’re seeing that it’s more useful for more of their queries.”. Google attributed the overall search volume increase to voice and visual search features. When analyzing different search types in his testimony, it was unclear if Cue was applying the same comparative framework. However, the remarks made by the Apple executive imply that a radical change in search could endanger Google’s hegemonic search division, which is now a target for U.S. antitrust authorities, who brought two significant cases against the business. Google pays the iPhone manufacturer about $20 billion annually, or roughly 36% of its search advertising revenue from the Safari browser, for the default search engine on Apple’s browser. Among the remedies the U.S. government has proposed is prohibiting Google from compensating businesses to be the default search engine. The Justice Department has suggested dismantling its hegemony in internet searches. Google is not helpless. After ChatGPT’s successful late 2022 launch, critics dismissed it as an also-ran in the AI race. However, Google has used its enormous data collection and deep financial resources to finance its AI initiatives.