Key Takeaways
• Apple is reportedly developing its own AI-powered search tool to integrate with Safari
• The news caused Alphabet’s stock to fall over 7%, wiping out $150 billion in market value
• Google currently pays Apple an estimated $20 billion annually to be the default Safari search engine
• A shift by Apple could disrupt Google’s dominant position in mobile search and advertising
A reported move by Apple to launch its own AI-powered search engine has sent shockwaves through Silicon Valley, triggering a 7% drop in Alphabet’s stock and erasing approximately $150 billion in market value from Google’s parent company.
According to a Reuters source, Apple is preparing to embed an artificial intelligence-driven search feature directly into its Safari internet browser.
This tool could eventually replace Google as the default search provider on Apple devices, threatening one of Google’s most lucrative partnerships.
What’s at Stake for Google?
Google currently holds its position on Safari through a high-stakes agreement, reportedly paying Apple around $20 billion per year to remain the browser’s default search engine.
This deal contributes significantly to Google’s search advertising revenue, particularly on mobile.
If Apple’s new AI-driven solution takes its place, Google stands to lose:
• Exclusive access to hundreds of millions of iPhone and Mac users
• A major source of mobile search traffic and advertising revenue
• Its near-monopoly status in the global search engine market
Apple executive Eddy Cue, as cited by the Reuters source, indicated that a transition may already be happening, noting that searches on Safari declined last month, as users increasingly turned to AI-powered alternatives.
Apple’s Potential Strategy and Industry Implications
The reported AI search tool would likely deliver answers and insights directly, bypassing traditional link-based search models.
This aligns with recent trends in consumer behavior, where users expect faster, more conversational search results through generative AI.
If implemented, Apple’s strategy could:
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Provide a native, privacy-focused search tool embedded into the Apple ecosystem
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Enable tighter control over user experience and data monetization
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Open up new revenue streams outside of Google’s ad ecosystem
• Apple could capture a portion of the global search and digital ad market
• Safari’s integration across iOS and macOS gives Apple a competitive launchpad
• The shift could accelerate adoption of AI-first search alternatives across the industry
Google’s Response and Ongoing AI Push
Despite the market reaction, Google is actively investing in its own AI infrastructure. The company has launched AI Overviews, which deliver summarized answers above standard search results, and continues to expand the capabilities of its Gemini AI model.
Google CEO Sundar Pichai recently expressed interest in partnering with Apple to bring Gemini’s technology to future iPhone models.
Such a collaboration, if successful, could potentially soften the impact of a Safari switch, but would still represent a significant shift in the tech power balance.
“Google also faces other potential rivals including OpenAI, which has added search functions to ChatGPT.”
If Apple does move forward with its own AI search offering, it wouldn’t just alter market share. It could reshape how users interact with the internet entirely.
By embedding AI directly into Safari, Apple would join a growing wave of companies rethinking what search means shifting from keyword-based queries and sponsored links to AI-generated insights and task-driven experiences.
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