-
Google stock tumbled Wednesday after
Apple’s
executive Eddy Cue said AI rivals were cutting into the search giant. - Google responded by saying that’s not the case.
- It’s conceivable that both points of view hold merit. The consequences could not be more significant.
Is
Google
screwed?
That’s the $2 trillion query that has puzzled the technology sector since Wednesday’s major announcement: A key
Apple executive said search queries on the company’s Safari browser were declining
since individuals started utilizing AI engines such as ChatGPT instead.
Investors immediately acted as if Google’s astonishing run at the top of the tech heap was over, and slashed the company’s stock by more than 8%.
But a day later, Google’s stock was climbing back up a bit, and there’s a healthy debate about what Cue’s statement means — as well as why he said it.
Spoiler: I won’t be resolving this issue today. However, let’s take a moment to examine the argument presented.
The clearest interpretation of Cue’s remarks mirrored how Wall Street saw it: Google’s supremacy in searches was diminishing due to competition from AI entities.
After all, fear of being usurped by AI is what pushed Google to fast-track its own AI efforts, even when some of those efforts created
embarrassing
results
.
But later on Wednesday,
Google issued a release statement.
That essentially indicated Cue was incorrect, though it wasn’t explicitly stated. The firm mentioned they were still observing growing search volumes and pointed out this growth encompassed “an uptick in overall inquiries originating from Apple’s gadgets and operating systems.”
So that
looks
It’s like two of the globe’s strongest and priciest corporations are at odds over straightforward, verifiable truths.
However, those who pay close attention to such matters are zeroing in on three crucial terms in Google’s statement: “total,” “devices,” and “platforms.” Notably absent from the discussion is another term: “Safari.”
And that’s causing them to interpret Google’s statement as follows: “Perhaps Apple truly
is
noticing a decrease in search activity on Safari, which is the standard web browser for iPhones. However, you can still utilize Google on iPhones through alternative means — specifically, by using the
Google app
, but also through Google’s own
Chrome browser
And people are increasingly using them instead — sufficiently to offset any decreases observed elsewhere.”
If this translation holds true, it might offer some comfort to Google and its supporters, although not entirely. Cue mentioned that searches on Safari have decreased for the first time ever, which isn’t the sort of indicator you can easily dismiss.
Even if someone uses Safari for Google searches
are
Shifting to apps like Google also highlights that individuals who previously simply typed queries into their iPhone’s web browser can now obtain results through different means. There’s no reason why these same people couldn’t explore alternatives such as competing platforms like ChatGPT for their searches.
A representative from Google chose not to comment, and Apple has yet to respond to my inquiry for an official statement.
Investors at Google appear somewhat unconvinced by the company’s stance; as of Thursday, the stock price has risen by 3%, yet this leaves Google valued at 5% lower compared to its standing from Wednesday morning, coinciding with the commencement of Cue’s testimony.
The antitrust court case between US authorities and Google
.
This leads us to the second query that observers of Google and Apple are pondering: What prompted Cue to make those statements in court?
I’m an
Occam’s razor
Dude, initially, I thought that Cue responded to the questions posed during his trial.
However, there’s also a 4D chess strategy presented by analysts such as Michael Nathanson from MoffettNathanson. The idea behind this approach is that Cue has motivation to depict Google as being vulnerable.
That’s because
Google annually pays Apple at least $20 billion.
To set Google as the default search engine on Safari (which allows Cue access to Google’s search data), and a federal judge has previously stated that
Google possesses an unlawful monopoly in the search sector.
.
One potential solution the judge might advocate for would be to prohibit Google from making payments to Apple for that coveted space — which would imply
Apple might lose all of that lucrative income.
.
So, the theory goes, convincing the judge that Google no longer has a stranglehold on search, because of AI competition, might allow those payments to keep flowing after all.
The same theory can clarify why Google responded cautiously on Wednesday evening; the corporation aimed to strike a balance between highlighting its achievements—something beneficial for investors but potentially detrimental to its legal stance—and admitting it faces genuine competitors—information that might benefit them legally yet harm their competitive position in the marketplace.
This leads us back to our initial question: Is Google actually beginning to fall behind?
ChatGPTs
Of the world, and possibly experiencing an irreversible downturn, much like what happened to Pay-TV networks a decade back? Alternatively, is it managing to stay competitive amidst the rivalry? The response can vary based on who you ask; Google may provide differing answers depending on your query.
Correction: May 8, 2025 — A previous edition of this article incorrectly stated the parent company of the Safari browser. It is owned by Apple, not Google.
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