Apple is gearing up to integrate artificial intelligence (AI) into its Safari browser, a move that could significantly disrupt the online search landscape dominated by Google. This development comes at a time when users are increasingly turning to AI-driven search tools, and it could potentially reshape how millions of iPhone users access information online.
On May 8, 2025, Eddy Cue, Apple's senior vice president of services, revealed during a court hearing related to a major antitrust lawsuit against Google that the company is considering a major overhaul of Safari. Cue noted that there has been a decline in search activity on Safari for the first time, attributed to users increasingly relying on AI services like ChatGPT and Perplexity. This shift in user behavior has prompted Apple to explore enhancements that could improve the search experience.
As a result of this news, Alphabet Inc., Google's parent company, saw its stock plummet by 7.3%, leading to a staggering market value loss of approximately $150 billion. Analysts suggest that Apple's planned integration of AI into Safari poses a direct threat to Google's long-held dominance in the search market, where it commands nearly 90% of the share.
Currently, Google is the default search engine on Safari, a position it pays Apple around $20 billion annually to maintain. This lucrative arrangement accounts for about 36% of Google's search advertising revenue through Safari. However, with Apple exploring AI options, this could change the competitive dynamics significantly.
Gil Luria, an analyst at D.A. Davidson, commented that losing its status as the sole search provider on Apple’s platform would have dire consequences for Google, regardless of any additional measures that may be implemented in the future. "Advertisers primarily allocate their entire search budgets to Google because it holds nearly 90% of the market share, which constitutes a monopoly. If viable alternatives for search emerge, many advertisers may consider reallocating their budgets away from Google," Luria explained.
In response to the rising competition, Google has also ramped up its investment in AI technologies. Following the buzz surrounding the launch of ChatGPT in late 2022, Google introduced an AI mode on its search platform to retain its vast user base. Recently, it expanded its AI Overviews feature, which summarizes information using AI, to users in over 100 countries, further integrating ads into this feature to boost advertising revenue.
Sundar Pichai, CEO of Google, testified in the antitrust case last month, expressing hopes for a potential agreement with Apple by mid-2025 to incorporate Google's Gemini AI technology into Apple's new devices. Reports from Bloomberg indicate that Cue is also considering partnerships with other AI search providers, such as OpenAI and Perplexity AI, to enhance Safari's search capabilities.
Yory Wurmser, a leading analyst at eMarketer, noted that Apple's plans reflect significant advancements in generative search tools like ChatGPT and Perplexity. He emphasized the critical importance of maintaining core AI capabilities, especially as Google continues to invest heavily to retain its market position.
Moreover, research from Counterpoint shows that Apple Watch shipments fell by 19% in 2024, but a recovery is anticipated in the latter half of 2025, aided by new models like the Watch SE and Ultra. This trend underscores the importance of innovation across Apple's product lines as it navigates a competitive landscape.
As the battle for search supremacy heats up, the stakes are high for both companies. Apple’s potential integration of AI into Safari could not only enhance user experience but also challenge Google's longstanding monopoly in online search. The implications of these changes are profound, as they could lead to a more diversified search ecosystem where users have greater options and advertisers may shift their strategies.
In conclusion, the evolving dynamics between Apple and Google signal a pivotal moment in the tech industry, where AI advancements are reshaping traditional business models and user expectations. Both companies are poised to make significant moves in the coming months, and the outcome of this rivalry could redefine the future of online search.
