Alphabet shares plunge over 7% as Apple plans to challenge Google's search engine monopoly

Shares of Alphabet, the parent company of Google, plunged as much as 9% on Wednesday after reports emerged that Apple is exploring AI search in its browser. The shares opened at $161 and closed more than 7% lower at $152 per share.

The fall was largely attributed to Apple executives’ testimony to the Federal court that the fall in search engine traffic was due to Apple products last month. Eddy Cue, Apple’s senior Vice president, told the Washington Antitrust trial that Google’s search engine is losing traffic to AI search like Chat GPT, Perplexity and others.

Further, he clarified that this has been the sharpest drop in traffic in over two decades, and his comments suggest that Apple is exploring AI search options in its own Safari browser, potentially replacing conventional search engines like Google search.

Apple has a default browser deal with Google, which involves Google paying Apple to set Google search as a default search engine in Safari browser across all Apple devices. In 2022, the payment amounted to $20 billion, representing 36% of Google’s ad revenue from Safari searches.

As Apple hints at introducing AI search in its Safari browser, it could impact Google’s search engine monopoly and its pole position in the search market, thereby impacting Google’s advertising revenue. In Q1 2025, Google’s advertising revenue stood at $66.8 billion, 52.5% of the total $127 billion for parent Alphabet’s revenue.