synopsis

Apple’s senior vice president of services, Eddy Cue, revealed this in a testimony in the ongoing U.S. Department of Justice lawsuit against Google.

Apple Inc. (AAPL) is exploring ways to focus on artificial intelligence (AI) powered search in the Safari web browser as its $20 billion deal with Alphabet Inc.’s (GOOG) (GOOGL) Google hangs in the balance.

Apple’s stock was down 1.80% at the time of writing, while Alphabet’s shares fell 8.90%.

According to a Bloomberg report, Apple’s senior vice president of services, Eddy Cue, revealed this in a testimony on Wednesday in the ongoing U.S. Department of Justice lawsuit against Google.

Cue added that Safari’s search volume declined for the first time in April because of artificial intelligence (AI). He observed that people will eventually use AI-powered search engines from providers like OpenAI, Perplexity, and Anthropic, among others.

He said these AI search engines could eventually find a place in Safari.

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

However, Cue thinks that the existing Google deal offers Apple the best financial terms, and he wants it to remain the default search engine in the Safari browser.

At the core of DOJ’s antitrust lawsuit against Google is the company’s $20 billion deal with Apple – the search giant paid the iPhone maker this eye-watering sum in 2022 to be the default search engine in the Safari browser.

The DOJ sued Google in 2020, accusing it of maintaining a search monopoly via deals with companies like Apple for prime placement of its search engine. Remedies proposed by the DOJ include the divestment of the Google Chrome browser.

The fallout threatens to impact both Google and Apple. The deal lets the Sundar Pichai-led company grab the eyeballs on the most-used smartphone in the U.S., while Apple has a lucrative revenue source.

A Bloomberg analysis pegs this at 17.50% of Apple’s operating income in 2020.

Apple’s stock has declined nearly 22% year-to-date, while Alphabet’s shares are down 21%.

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