Apple working to move to AI search in browser amid Google fallout

Apple Inc. is “actively looking at” reshaping the Safari web browser on its devices to focus on AI-powered search engines in light of the potential collapse of its Google deal and broader industry shifts.

Eddy Cue, Apple’s senior vice president of services, made the disclosure Wednesday during his testimony in the U.S. Justice Department’s lawsuit against Alphabet Inc. The heart of the dispute is Apple and Google’s estimated $20 billion-a-year deal that makes Google the default offering for queries in Apple’s included browser.

He also noted that searches on Safari dipped for the first time last month, which he attributed to people using AI. Cue said he believes that AI search providers, including OpenAI, Perplexity AI Inc. and Anthropic PBC, will eventually replace standard search engines like Google. He said he believes Apple will add those players as options in Safari in the future.

“We will add them to the list – they probably won’t be the default,” he said, adding that they still need to improve. Cue specifically said the company has had some discussions with Perplexity.

“Prior to AI, my feeling around this was, none of the others were valid choices,” Cue said. “I think today there is much greater potential because there are new entrants attacking the problem in a different way.”

Right now, Apple offers OpenAI’s ChatGPT as an option in Siri and is expected to add Gemini, Google’s AI search product, later this year. Cue said Apple also looked at Anthropic, Perplexity, DeepSeek and Grok for this purpose. Cue said the agreement with OpenAI allows it to add other AI providers into the company’s operating system, including its own.

Alphabet shares tumbled as much as 7% on Wednesday, dragging the broader market lower. Apple shares also slumped on Cue’s comments, slipping as much as 2.5%. The S&P 500 Index briefly flipped into the red, erasing an earlier gain that had topped 0.5%.

Before ChatGPT was chosen last year as part of Apple Intelligence in iOS 18, there was a “bake-off” with Google, Cue said. He said Google had provided a term sheet that “had a lot of things Apple wouldn’t agree to and didn’t agree to with OpenAI.”

Technology is changing fast enough that people may not even use the same devices in a few years, Cue said. “You may not need an iPhone 10 years from now as crazy as it sounds,” he said. “The only way you truly have true competition is when you have technology shifts. Technology shifts create these opportunities. AI is a new technology shift, and it’s creating new opportunities for new entrants.”

Cue said that, in order to improve, the AI players would need to improve their search indexes. But, even if that doesn’t happen quickly, they have other features that are “so much better that people will switch.”

“There’s enough money now, enough large players, that I don’t see how it doesn’t happen,” he said, referring to a switch from standard search to AI.

Cue also said that large language models – the underlying technology for generative AI – will continue to improve, giving users more reason to switch.

Still, he believes Google should remain the default in Safari, saying that he has lost sleep over the possibility of losing the revenue share from their agreement. He said Apple’s agreement with Google today on regular search still has the best financial terms.

Last year, the companies expanded their deal to include Google Lens integration as part of the Visual Intelligence feature on the latest iPhones. That allows a user to take a picture and use Google AI to analyze it. Cue also said that its agreement for Microsoft Corp.’s Bing – a non-default option in Safari, was recently amended to be year-to-year.