Investing.com -- Alphabet (NASDAQ:GOOGL) shares fell 5% following reports that Apple (NASDAQ:AAPL) is considering the implementation of an AI search feature in its browser, potentially challenging Google’s dominance in search.
The decline comes as Apple’s senior vice president of services, Eddy Cue, revealed that searches in the company’s browser experienced a decline for the first time in April. Cue also mentioned that Apple is actively exploring the addition of AI search capabilities to its browser, sparking concerns over Alphabet’s future revenue share from search. These comments suggest that Apple may be looking to reduce its reliance on Google’s search engine, potentially impacting Alphabet’s ad revenue.
Cue’s remarks, which were first reported by Bloomberg, emerged during a trial over Google’s search practices. The trial has brought to light Apple’s consideration of other search providers like Perplexity and Anthropic as possible alternatives. This news has alarmed investors, as Google’s search engine has been a significant source of revenue for Alphabet, and any shift in market dynamics could have substantial financial implications.
While the full impact of Apple’s potential move into AI search is yet to be seen, Alphabet’s stock reaction reflects immediate investor concern over the company’s ability to maintain its search-related revenue if Apple becomes a competitor in this space.
Shares of Apple also declined, falling 2%.
