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Google's parent-Alphabet stock fell 9% on Wednesday after Apple's top executive said it was “looking” an alternative search engine for web browsers powered by an iPhone maker.
Eddy Cue, Apple's Senior Vice President of Services, told US courts he was talking to AI startups such as baffling about providing search tools as an alternative to Google.
Cue said Apple is planning to “add to list” of tools that iPhone and iPad owners can choose to set as a preferred option for searching the web through the Safari browser without giving time frames to potential movements.
Apple was also considering adding AI services to its iPhone from DeepSeek in China, he said.
The move to a new search provider will threaten Alphabet's multi-billion dollar relationship with Apple. Apple is Google's default search engine for iPhone and Safari browsers. With this agreement, Google will bring hundreds of millions of users and boost the advertising business.
Alphabet's stock fell nearly 8% in early afternoon trading in New York, with Apple down almost 2%. The stock price fell after Bloomberg previously reported Kew's comments.
Cue testified last year as part of a hearing to determine the antitrust law after the US Department of Justice's legal victory over Google. A federal judge ruled last August that Google maintained an illegal monopoly in searches through transactions with wireless carriers, browser developers and device manufacturers.
Apple could earn billions of dollars if its deal with Google is rewinded as a result of the ruling.
Google pays as much as $200 billion a year to become Apple's default search engine. The long-standing deal between the two Silicon Valley businesses has been at the heart of US government incidents.
Apple has introduced several new generation AI tools to its iPhone over the past year, including access to Openai's ChatGPT via SIRI assistant. However, other features, including a wider upgrade to Siri, are lagging behind, driving the fear that Apple is lagging behind rivals such as Google, Amazon and Microsoft.
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The AI tool provides users with a complete written response to search queries backed up by supporting links rather than a list of Google's traditional web pages. Google has also upgraded its search engine to incorporate results using generated AI.
In testimony on Wednesday, QUE said AI opened the door to serious competition with Google for the first time, and Apple discussed the addition of various AI features to the iPhone from various new providers, including baffling, humanity, Chinese Deep Sheik and Elon Musk's Xai.