Google shaken as Apple flags AI search shift; $20 billion deal at risk

The news: Apple senior vice president Eddy Cue told a federal judge Wednesday that AI search tools are starting to erode Google’s dominance—and threaten the $20 billion Google pays Apple to remain Safari’s default search engine.

Cue testified that Safari search volume dropped in April 2025, its first decline in 22 years, attributing the dip to the rise of AI search tools like ChatGPT, Anthropic, and Perplexity. Cue hinted that Apple would soon integrate these tools into Safari.

Instant market reaction: Cue’s testimony that AI will replace search engines triggered a sudden selloff, with Alphabet shares dropping 7% Wednesday, wiping out $155 billion from its market cap, per Yahoo.

Investor response underscores the perceived threat of AI to Google’s core search business and the importance of its deal with Apple.

The challengers: Testimony that Safari search volume is declining may signal the beginning of AI challenging traditional search.

• AI search stalwart Perplexity is preparing to launch its Comet web browser this month. It’s the biggest challenger to Chrome/Google Search.
• OpenAI made its ChatGPT Search available for free to all users. While search isn’t its key focus, it could ramp up competition given its interest in buying Google Chrome.

Google’s quick response: Google disputed Cue’s narrative entirely in a blog post. The company claims search usage is still growing—including on Apple devices.

“We continue to see overall query growth in Search. That includes an increase in total queries coming from Apple’s devices and platforms.”

The conflicting reports now put Google and Apple at odds and could unravel not just existing search deals but also plans to integrate Gemini into Apple Intelligence.