Apple's stock price falls after an executive says it is considering integrating AI into Safari

Apple's stock dips after AI integration plans for Safari were revealed.

: Eddy Cue, Apple's senior vice president of services, announced that Apple is contemplating AI integration into Safari, affecting traditional search engines like Google. This announcement comes during Cue's testimony in Google's antitrust trial. As a result, both Apple and Alphabet saw their stock prices fall by 2% and 8%, respectively. Apple's partnership with Google involves $20 billion annually, indicating high stakes for these potential changes.

On May 7, 2025, Eddy Cue, Apple's senior vice president of services, revealed that Apple is considering integrating artificial intelligence (AI) capabilities into its Safari web browser. This move suggests that AI might replace current standard search engines, such as Google, in the future. Cue's statements were part of his testimony during the remedies phase of Google's antitrust trial in Washington. He highlighted the first-ever decrease in Google searches via Safari, attributing this to the rising influence of AI search engines, which marks a significant shift after 22 years since Safari's inception in 2003. Despite expressing interest in AI, Cue acknowledged the current limitations of AI search technologies, citing that they are not yet ready for immediate implementation on Safari. Apple has initiated discussions with key AI players like OpenAI, Perplexity, and Anthropic to explore future collaborations. In August, Apple announced a partnership with OpenAI to incorporate ChatGPT into its products, but Cue emphasized the importance of flexibility if other companies lead in AI search advancements.

The financial implications of this strategic pivot were felt in the stock market as both Apple and Alphabet experienced a decline in share prices—Apple by about 2% and Alphabet by approximately 8%—following Bloomberg's coverage of Cue's testimony. Apple's relationship with Google is particularly crucial due to the $20 billion annual fee Google pays Apple to be the default search engine on Safari. This agreement is not just about the upfront fee; Apple also receives a portion of the advertising revenue generated from searches conducted on Safari.

The significance of Apple's testimony in this trial cannot be overstated, given that Google faces accusations from the Department of Justice (DOJ) of maintaining a monopolistic hold on the search and search advertising markets. The exclusivity arrangement between Google and Apple is central to the DOJ's case, arguing that such agreements enable Google's monopoly. Judge Amit Mehta of the US District Court in Washington, DC, recently ruled against Google, though the tech giant plans to appeal the decision post-remedy phase completion.

Beyond the current trial, Google is also contending with another antitrust suit filed by the DOJ in 2023, tackling alleged monopolies in the digital advertising technology sector. This additional case saw Google being found guilty of two out of three charges, with plans to appeal the ruling already in place. Both antitrust suits bring into question the future layouts of strategic partnerships and market competitions, especially in light of Apple's exploration into AI-enhanced browser capabilities.

This scenario encapsulates a pivotal moment for tech giants like Apple and Google. The changing landscape due to advancing AI technologies could redefine competitive practices and market control, impacting revenue models and corporate alliances. Executives from companies such as Yahoo, Microsoft, and OpenAI are expected to contribute further testimony, potentially influencing the trial's outcome and the broader industry implications.

Sources: Gizmodo, Bloomberg

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