Alphabet Inc. stock suffered a steep decline on Wednesday after a high-profile disclosure in the ongoing federal antitrust trial against Google revealed that Apple is actively considering integrating AI-powered search alternatives into its Safari browser.
Shares of Alphabet dropped more than 8% in midday trading, with the news triggering a wave of investor concern about the future of Google’s dominant position as the default search engine on Apple devices.
The selloff followed testimony from Eddy Cue, Apple’s Senior Vice President of Services, who told the court that Google searches conducted via Safari declined for the first time ever in April.
Cue attributed this drop to users increasingly turning to AI-driven search tools, such as those developed by Perplexity and Anthropic, rather than traditional search engines like Google.
He also confirmed that Apple receives over $20 billion annually from Google to keep its search engine as the default option in Safari-a deal now under intense scrutiny in the Department of Justice’s antitrust case.
Cue’s remarks highlighted Apple’s ongoing exploration of integrating AI search providers into Safari, raising the possibility that Google’s longstanding role as the default search engine could be at risk.
While Apple does not plan to immediately remove Google as the default, the company is preparing for a future where AI search engines play a much larger role in how users access information on its devices.
The revelations come as the Department of Justice seeks to end Google’s exclusive default status on Apple devices, a move that could significantly erode Google’s search traffic and the lucrative ad revenue it generates from iOS users.
The potential for Apple to diversify its search options, combined with the broader industry shift toward AI-driven search, has intensified competitive and regulatory pressures on Google’s core business.
In response to these challenges, Google has accelerated its own AI initiatives, introducing new features such as generative AI responses and launching the Gemini AI search platform. However, the market’s reaction reflects deep investor concerns that the company’s core search business could be fundamentally disrupted if Apple and other partners shift toward AI-powered alternatives.
The combination of declining Safari search volumes, the threat of losing default status, and the rise of AI competition has cast a shadow over Alphabet’s outlook, leading to a swift and steep selloff in its shares as the antitrust trial continues to unfold.