Google AI-ngst: Apple Deal May Disintegrate Even Without Court Intervention
The future of traditional search engines got a rude awakening last week as an Apple executive predicted their eventual demise.
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Apple SVP of Services Eddy Cue said last week that AI will one day replace search engines like Google. His statement, made during the penalty phase of the antitrust trial against Google-parent Alphabet, could spell trouble for the deal that makes Google the default search engine on Apple’s Safari browser.
Apple makes $20 billion a year from the tie-up and Google generates billions from the searches made on Safari. Apple has deals with other search engines, including Microsoft’s Bing and DuckDuckGo, but none of them are nearly as lucrative.
Cue said he expects Safari to eventually swap out Google for AI services from up-and-comers including OpenAI, Anthropic, and Perplexity.
AI-xistential Crisis
A US district court judge last year ruled that Alphabet has an illegal search-engine monopoly, and now regulators are trying to convince the court to send the tech giant to bed without its (metaphorical) supper. One possible penalty could be a Gen Alpha classic: Taking away its iPad by forcing the end of Google’s partnership with Apple (and others). It’s not the only marketplace hazard facing Alphabet: A ruling in a separate case has determined the company holds monopolies in ad technology services.
Meanwhile, Google may be losing its grip even without government intervention:
- The number of Google searches on Apple devices declined for the first time last month, according to Cue, who blamed users switching to AI. Google denied this and said its Safari searches are still growing.
- Google’s global market share peaked at 93% in 2023 but has since fallen below 90% and stayed there, according to StatCounter. Last month, its global market share hit a decade low, and its US dominance slipped even further, to 86%.
Long Way to Fall: With all the complaints about Google joining the “Rot Economy” (S/O Ed Zitron), the search engine dominates for now. Its next closest rival, Bing, accounts for 12% of the market. ChatGPT would make up less than 1% even if all its queries were counted as searches — rather than requests to write essays or generate anime-ified selfies. At last week’s trial, founder Sam Altman replied to a question about whether he thinks ChatGPT will replace Google with, “Probably not.” At the same time, Alphabet’s trying to bring its own AI to the party by integrating its AI assistant Gemini into Google searches. Still, the stakes of losing any market share to up-and-coming rivals are high: Ads on Google, Gmail, and other properties make up more than half of Alphabet’s revenue.
