Alphabet share price fell sharply on Wednesday, tumbling over 7% following reports that Apple Inc. is planning to integrate AI-powered search options into its Safari browser. Google-parent Alphabet shares closed 7.51% lower at $152.80, wiping out approximately $150 billion in market capitalization.
The development marks a significant setback for Google, whose core advertising business heavily depends on iPhone users conducting searches through its engine. According to a Reuters source familiar with the matter, Apple executive Eddy Cue testified during an antitrust trial that the iPhone maker is “actively looking at” reshaping its Safari browser.
Cue also noted that searches conducted through Safari declined for the first time last month, attributing the trend to users increasingly turning to artificial intelligence for information. Apple shares closed 1.1% lower following the news.
In a blog post, Google said it continues to witness growth in overall search queries, including those originating from Apple devices and platforms. “People are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways,” the company stated, citing features like voice and visual search as key growth drivers.
However, it remains unclear whether Cue’s testimony was based on comparable metrics, raising questions about the scope and scale of the observed decline in Safari-based searches. Reuters reported.
The prospect of Apple introducing its own AI-powered search capabilities suggests a potentially transformative shift in the search landscape, posing a significant threat to Google’s longstanding dominance.
Google, which pays Apple an estimated $20 billion annually to remain the default search engine on Safari — roughly 36% of its search ad revenue from Safari users — may now face strategic and regulatory challenges, the report said.
The move comes amid growing scrutiny of Google’s market power. The U.S. Justice Department has proposed banning the company from paying to be the default search engine as one of several remedies in two major antitrust lawsuits aimed at curbing its control over online search.
Alphabet Share Price Performance
Despite Wednesday’s sharp decline, Alphabet share price has gained 2.4% over the past month. However, Alphabet stock price has dropped 16% in the past six months and is down 20% year-to-date. On a one-year basis, Alphabet shares have fallen 12%. Nonetheless, the stock has delivered a robust 120% return over the past five years.
(With inputs from Reuters)
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