Apple’s AI Search Push Threatens Google’s $20B Safari Deal

Apple is reportedly planning to add AI-powered search options to its Safari browser, posing a major threat to Google’s dominance in online search. The move signals a potential end to Google’s exclusive deal as Safari’s default search engine—a partnership estimated to bring Apple around $20 billion annually and account for roughly 36% of Google’s mobile search ad revenue through Safari.

The news triggered a sharp 7.3% drop in Alphabet (NASDAQ:GOOGL) shares, erasing about $150 billion in market value. Apple (NASDAQ:AAPL) stock also slipped 1.1%. Testifying in an ongoing U.S. antitrust case, Apple executive Eddy Cue reportedly noted a decline in Safari searches for the first time, attributing the shift to users increasingly relying on AI tools.

Google pushed back, claiming search query volumes, including those from Apple devices, continue to rise—fueled by innovations in voice and visual search. Still, Apple’s interest in generative AI-powered alternatives like OpenAI’s ChatGPT and Perplexity AI suggests a significant shift in user behavior that could reshape the search landscape.

Analysts warn that losing exclusivity on Apple devices would hit Google hard, as many advertisers currently concentrate ad spending on Google due to its near-monopoly status with 90% market share. With viable AI alternatives emerging, marketers may start reallocating budgets.

Google, however, is stepping up its AI game. The tech giant has rolled out "AI Overviews" in over 100 countries and integrated ads into the feature. CEO Sundar Pichai also revealed ongoing talks with Apple to incorporate Google’s Gemini AI into future iPhones.

Apple’s expanding search partnerships highlight the rapid rise of AI-driven platforms. ChatGPT alone saw over 1 billion weekly web searches in April and boasts 400 million weekly active users, underlining the growing competition Google now faces.