Apple says searches are shrinking because people are using AI instead. Now Google's stock is tanking.

6 days ago 4

By Peter Kafka Chief Correspondent covering media and technology

Google office successful Mountain View, California.

Google has been worrying astir losing hunt stock to AI engines similar ChatGPT for a mates of years.
It looks similar that's started to happen, an Apple enforcement testified successful court.
Google shares instantly fell.

Ever since ChatGPT burst onto the country successful 2022, investors person wondered astir the implications for Google. Mainly: What happens to the institution if tons of radical commencement utilizing AI engines to reply questions alternatively of Google's ascendant hunt engine?

Now it looks similar that mightiness really beryllium happening.

Eddy Cue, an Apple executive, said searches connected Apple's Safari browser shrank for the archetypal clip ever successful April — a alteration helium chalked up to radical utilizing AI instead.

Cue made that disclosure connected Wednesday portion testifying successful the national antitrust suit against Google's genitor company, Alphabet, because Apple receives much than $20 cardinal a twelvemonth from Google to marque it the default hunt motor connected Apple devices.

He besides said Apple would apt adhd AI engines arsenic hunt alternatives connected its devices implicit time, Bloomberg reports:

[Cue] noted that searches connected Safari dipped for the archetypal clip past month, which helium attributed to radical utilizing AI.Cue said helium believes that AI hunt providers, including OpenAI, Perplexity AI Inc. and Anthropic PBC, volition yet regenerate modular hunt engines similar Google. He said helium believes Apple volition adhd those players arsenic options successful Safari successful the future."We volition adhd them to the database — they astir apt won't beryllium the default," helium said, adding that they inactive request to improve.

Cue's grounds neatly explains a large crushed that investors person been pouring wealth into AI companies similar OpenAI astatine progressively immense valuations: They're hoping that astatine a minimum, they'll beryllium capable to carve retired immoderate of Google's ownership of the banal marketplace — the superior crushed Google is worthy $2 trillion today.

That imaginable is besides what has prompted Google to crook itself into an AI company, by turning accepted searches into queries it answers with its Gemini AI engine. Early stumbles successful those efforts generated a batch of mockery — spot glue pizza — but Google has stuck with it, insisting that users similar the results.

On the company's net telephone past month, Google CEO Sundar Pichai said its efforts were moving and that its AI motor had helped summation hunt volume: "Nearly a twelvemonth aft we launched AI Overviews successful the US, we proceed to spot that usage maturation is expanding arsenic radical larn that Search is much utile for much of their queries," helium told analysts.

Cue's grounds suggests that those efforts haven't been capable to support Google's market. Google shares fell much than 7% connected Wednesday.

Google released a connection precocious Wednesday disputing Cue's assertion and saying it continues to spot "overall query maturation successful search."

"That includes an summation successful full queries coming from Apple's devices and platforms," the connection said.