Why a key Apple executive is telling a judge that AI is replacing Google search
Apple is in danger of losing a nice stream of cash as the deal that nets it $20 billion a year from Google is in danger of being shut down by the DOJ. The Alphabet unit pays Apple to allow it to be the default search engine on Apple devices. That Google can afford to pay Apple this sum without blinking is a sign of just how profitable search is for the company and why the DOJ is looking to break up Google.
As we mentioned the other day, Apple's senior vice president of services, Eddy Cue said that AI could replace the iPhone by 2035. This was part of an argument Cue used during his testimony during the US Justice Department's antitrust trial against Google. In an attempt to get the Justice Department to back down from breaking up Google's search engine and Apple's search deal with Google in the process, Cue pointed out that thanks to AI, the number of Google search queries on Apple devices declined in April for the first time. Cue said that AI providers will eventually replace search engines on Safari.
Cue happens to be right. Personally, I find myself turning to ChatGPT or Gemini for search, and when it comes to Siri and Google Assistant, I tap on the AI apps even more. But even if Cue is right, that doesn't mean that Apple wants to lose the Google that laid the Golden Egg. With its search engine the default option on Apple's 2 million active devices, both Apple and Google have something big to lose depending on the result of this trial.
By trying to persuade the judge that Apple's future plans call for Safari to replace Google Search with AI, Cue is hoping to prove to the judge that there is no need to break up Google search. Apple also wants the judge to see that Apple does offer other search engines on Safari, including Yahoo Search, Bing, and DuckDuckGo. Apple does take a portion of the search revenue that these search engines generate from Safari, but nowhere near the amount of money that it receives from Google.
What Cue didn't mention in court is that Apple and Google are on the verge of announcing an AI partnership revolving around Gemini. In fact, when you ask a question of Google search on the iPhone, iPad, or the Mac, you often get an answer from AI first. He did admit during testimony to losing sleep over the possibility of his services unit losing Google's big check. He did tell the judge that Google should remain the default search option, and while other search engines will be added, Cue says that they probably won't be the default choice for iPhone, iPad, and Mac users.
One possibility that Apple might be forced to consider is dropping all exclusive deals, including Google's, and working out partnerships with as many search providers as possible. If Apple can take a slice of each search provider's revenue, it might be able to equal the current deal it has with Google at the worst, or generate even more revenue in the best case scenario.
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