Following Apple mentioning that it was looking to add AI search to the iPhone and perhaps replace Google, shares in the search engine giant dropped over 7% — and Google didn’t like it.
Apple’s comments were made by its senior vice president of services, Eddy Cue, in his testimony during the latest stage of the Department of Justice versus Google case. That case could see Google being forced to stop paying Apple for being the iPhone’s default search engine, and Cue suggested that Apple was looking for alternatives anyway.
According to Reuters, the comments hit Google parent company Alphabet hard. Its shares closed down 7.3%, representing a drop in its market value of approximately $150 billion.
The drop was significant enough that Google issued a rare, and terse, statement. The company chose to focus on how Cue had also said that for the first time ever, searches on Safari had dropped because of users turning to AI instead of Google.
“We continue to see overall query growth in Search,” says the short blog post. “That includes an increase in total queries coming from Apple’s devices and platforms.”
Google also says that people are finding its search more useful because of voice search and Google Lens. “We’re excited to continue this innovation and look forward to sharing more at Google I/O.”
The company may inadvertently have drawn attention to how Apple already has its own equivalent of Google Lens in its Visual Intelligence feature. However, it’s likely that Apple Intelligence will come to incorporate Google’s Gemini AI, as it already does ChatGPT.
At present, Apple continues to offer Google as the default search on iPhone. During previous testimony in the DOJ’s antitrust case against Google, it was revealed that the deal is worth around $20 billion annually to Apple.
Being forced to stop deals such as this with Apple and others, is only one possible outcome of the antitrust trial. The DOJ also wants to break up Google’s ad business.
