Apple VP: "AI Will Replace Existing Search Engines"... Alphabet Stock Plummets

An Apple vice president stated that search using artificial intelligence (AI) will replace existing search engines.

On the 7th (local time), Bloomberg News reported that Eddie Cue, Apple's senior vice president of services, testified as a witness in a trial held at the U.S. District Court in Washington, D.C., aimed at breaking Google's monopoly in the online search market.

Cue diagnosed, "The search volume of the Safari browser decreased for the first time last month," attributing it to people using AI more frequently. Safari is Apple's browser. Google has been sharing annual revenue of $20 billion with Apple as of 2022 in exchange for being the default search engine setting on Safari.

Cue stated, "AI-based search providers like OpenAI, Perplexity AI, and Anthropic will eventually replace existing search engines like Google," adding, "These companies' AI will be added as options available in Safari in the future."

However, he also mentioned, "Even if these AIs are added as options, they will not be the default search engine," and noted, "These AIs still need improvement."

Cue also mentioned that Apple has been in discussions with Perplexity.

Cue stated, "Even if these AIs do not improve quickly, their other features are so excellent that people will switch," and added, "There is no reason for a transition from traditional search to AI search not to occur, given the sufficient funding and large companies involved."

He further added, "As large language models (LLM), the core technology of generative AI, continue to advance, users will have more reasons to switch to AI-based search."

However, Cue mentioned, "I still believe Google should remain the default search engine on Safari. I've even lost sleep over the possibility of the revenue-sharing agreement with Google breaking."

Cue's remarks raised concerns that Google's dominance in search might be shaken. Consequently, the stock price of Alphabet, Google's parent company, plummeted by more than 7% on the New York Stock Exchange.

Reporter Yonghyun Shin, Hankyung.com yonghyun@hankyung.com