Apple to add AI-powered search to Safari in blow to Google, putting $20B search deal at risk

In a potential blow to Google, Apple is exploring plans to reshape Safari by adding AI-powered search engines, Bloomberg reported on Wednesday. The move could chip away at Google’s grip on search, especially on mobile devices where it pays billions to remain the default option.

“Apple Inc. is “actively looking at” revamping the Safari web browser on its devices to focus on AI-powered search engines, a seismic shift for the industry hastened by the potential end of a longtime partnership with Google,” Bloomberg reported.

Apple Eyes Move to AI Search, Ending Era Defined by Google

Apple’s Eddy Cue, a top executive, shared during testimony in the U.S. Justice Department’s antitrust case against Google’s parent company Alphabet that search activity on Safari dipped last month. Cue pointed to a growing number of users shifting toward AI-based tools instead.

Google currently shells out around $20 billion a year to Apple to stay front and center in Safari, a spot that gives it access to a massive chunk of search traffic and advertising dollars. That deal alone represents an estimated 36% of Google’s search ad revenue from Safari, according to analysts.

Losing that placement would be a major hit, especially as Google faces increasing pressure from AI competitors like OpenAI and Perplexity. Apple has already partnered with OpenAI to integrate ChatGPT into Siri, and Google is reportedly racing to secure a deal by mid-year to bring its Gemini AI into Apple devices.

The stock market took notice. Alphabet shares dropped 6%, while Apple shares slipped about 2% after the report came out. None of the companies involved—Apple, Google, or the DOJ—responded to Reuters’ requests for comment.

Cue reportedly told Bloomberg that he believes AI tools from OpenAI, Perplexity AI, and others will eventually replace traditional search engines like Google. While he doesn’t expect them to become the default option right away, “We will add them to the list – they probably won’t be the default,” he said.

Google, meanwhile, recently tried to reassure investors that its AI investments are driving strong returns in advertising. Its Q1 results beat expectations, but a shift in Apple’s loyalty could spark long-term consequences.

“The loss of exclusivity at Apple should have very severe consequences for Google even if there are no further measures,” D.A. Davidson analyst Gil Luria said.

“Many advertisers have all of their search advertising with Google because it is practically a monopoly with almost 90% share. If there were other viable alternatives for search, many advertisers could move much of their ad budgets away from Google to these other venues.”