Eddy Cue, senior vice president of internet software and services at Apple Inc., speaks during a keynote session at the South By Southwest (SXSW) conference in Austin, Texas, U.S., on Monday, March 12, 2018.
David Paul Morris | Bloomberg | Getty Images
Alphabet and Apple shares sank Wednesday after Eddy Cue, Apple’s services chief, said he believes that AI search engines will eventually replace standard search engines such as Google, according to Bloomberg.
Cue said he expects to add artificial intelligence services from OpenAI, Perplexity and Anthropic as search options in Apple’s Safari browser in the future, according to the report.
The Apple executive was testifying in a federal court in Washington as part of the Justice Department’s lawsuit against Alphabet. Last year, a U.S. District Court judge ruled that Google has illegally held a monopoly in the online search market, and now the judge is looking to determine what penalties or actions should be taken against the search company.
One major focus on the case is Google’s practice of paying platform providers such as Apple to become the default search engine on their platform.
The lawsuit and any potential remedies threaten Google’s lucrative advertising business, and Alphabet shares sank more than 7% on Wednesday.
But the lawsuit also threatens to ensnare Apple. Google pays the iPhone maker billions of dollars per year — as much as $20 billion per year back in 2022, according to testimony in the trial — to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users. Apple shares fell 2% during trading Wednesday.
Cue’s comments cast doubt on the long-term stability of the relationship. Cue said he believes Google should remain the default search option on Safari, saying he has lost sleep over the possibility of losing the revenue share from the two companies’ agreement, according to the report.
The Apple executive said searches on Safari declined for the first time in April, which Cue attributed to the rise in people using AI, according to the report.
Correction: Eddy Cue testified at the remedies trial that has followed a judge’s ruling that Google held a monopoly in its core market of internet search. A previous version of this story listed the incorrect Google antitrust case.
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