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 sunk Wednesday after Eddy Cue, Apple’s services chief, said he believes that AI search engines will eventually replace standard search engines like Google, according to Bloomberg.
Cue said he expects to add the 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 had illegally dominated ad-tech markets, 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 like Apple to become the default search engine.
The lawsuit and any potential remedies threaten Google’s lucrative advertising business, and Alphabet shares sunk more than 7% in trading 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 on 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 that searches on Safari declined for the first time in April, which Cue attributed to the rise of people using AI, according to the report.
WATCH: Apple says searches in Google browser fell for the first time in April
