During a U.S. Department of Justice antitrust trial against Alphabet, Apple executive Eddy Cue revealed that Safari search traffic declined for the first time last month, attributing the drop to users shifting toward AI-powered alternatives.
Google currently pays Apple an estimated $20 billion annually—about 36% of its Safari-based search ad revenue—to remain the default search engine on Safari. Losing this default position could significantly impact Google, especially as it contends with rising competition from AI innovators like OpenAI and Perplexity.
Apple has already partnered with OpenAI to integrate ChatGPT into Siri, while Google is working to finalize a deal by mid-year to incorporate its Gemini AI into Apple’s ecosystem.
Following the news, Alphabet shares fell by 6%, and Apple’s by about 2%. None of the involved parties, including the Department of Justice, responded to Reuters’ requests for comment.
Cue stated that he believes AI-based search providers will eventually replace traditional engines like Google and confirmed Apple’s plans to add these AI players as options in Safari—though they may not become the default.
Google recently attempted to reassure investors by highlighting that its AI investments continue to boost performance in its core advertising business. However, analysts warn that losing exclusivity with Apple could have serious implications.
“Even without additional restrictions, losing Apple as an exclusive partner could hit Google hard,” said Gil Luria, an analyst at D.A. Davidson. “Advertisers rely heavily on Google because of its near-monopoly. If viable search alternatives emerge, ad spending could quickly shift.”