AI Makes Its Entry: Google Under Pressure From Innovations

Google pays a whopping $20 billion a year to remain the default search engine for Apple products. That golden deal is at stake after an Apple executive revealed in a lawsuit that the company is seriously considering adding artificial intelligence to its browser.

One might think this is a mere inconsistency, but for Google, which makes more than half of its revenue and most of its profit from search traffic, this is a blow. Add to that the fact that searches via Safari dropped for the first time, and the situation becomes alarming.

The first shocks for Google

What may have seemed like minor fluctuations at first are becoming increasingly serious concerns. Google has built its reputation on a nearly unassailable monopoly for years, but now that foundation is starting to shake. What makes it even more dramatic is the growing trend of users increasingly directing their questions to AI systems like those of OpenAI or Anthropic instead of Google. The idea that “googling” might slowly become a thing of the past was once a futuristic fantasy. Now it seems like a reality that is approaching faster than expected.

Alphabet attempted to calm the situation after the lawsuit with a reassuring blog post, noting that searches on Apple devices were still increasing. However, this did not happen before the shares on Wednesday, down 7,3%. On a weekly basis, the forecast decline is now around 6%, resulting in a loss of around $120 billion in market value.

Is Alphabet losing its golden egg?

“The big question is, of course, is Alphabet losing its golden egg?” asks Art Hogan of B. Riley Wealth Management. This is not a rhetorical question, but a real concern. Since the rise of the search engine market, Google has been the undisputed king, but those days seem to be over.

It’s ironic timing: while Alphabet is going all-in on AI with its Gemini project, competitors like OpenAI are increasingly the first port of call for online queries. For Apple, it’s now just a matter of opening the door.

What makes this situation so special is that this isn’t just a battle between competitors, it’s a fundamental shift in how people search for information. Users no longer want a list of links; they want direct answers in natural language. Whoever provides those answers fastest and best wins the battle. And for the first time in two decades, it looks like Google won’t win this battle automatically.

Frequently Asked Questions

Why is Apple considering adding AI to its browser?
Apple is undergoing a strategic overhaul of its services and believes AI can provide users with a better, more direct way to find information.

What are the implications of declining Safari searches for Google?
The decline in searches has led to a significant drop in Alphabet's stock value, highlighting potential vulnerabilities in its dominant position in the market.

Why is this situation unique to Google?
This is no ordinary competition; it marks a shift from traditional search methods to a question-and-answer structure where AI can provide the information you want instantly, something Google is worried about for the first time.