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Google-parent Alphabet shares fell over 7% overnight; A $20 billion deal is on the lineAt the heart of Alphabet's fall is the likely termination of a deal valued at nearly $20 billion annually with Apple, that could alter their search engine prospects.By Hormaz Fatakia   May 8, 2025, 6:22:56 AM IST (Published)2 Min ReadGoogle-parent Alphabet's shares fell over 7% overnight and iPhone-maker Apple was the major trigger behind the fall.

In what could mark the end of a deal valued at nearly $20 billion annually between companies that are among the most valued in the world, Apple is "actively looking at" revamping its Safari Web Browser on its devices.

How? It plans to focus on AI-powered search engines. Currently, that deal worth billions makes Google the default search offering for queries in Apple's browser.

Apple's senior Vice President of the Services division, Eddy Cue, disclosed Apple's plans on Wednesday, during his testimony in the US Justice Department's lawsuit against Alphabet.

Cue disclosed that searches on Safari dipped for the first time last month, attributing the fall to the use of AI search providers by people, including OpenAI, Perplexity AI and Anthropic. He also said that Apple could bring them as options on Safari in the future.

“We will add them to the list — they probably won’t be the default,” he said, indicating that they still need to improve. Cue specifically said the company has had some discussions with Perplexity.

Apple users have been using Google as their default search engine since the first iPhone was launched in 2007.

Apple currently offers OpenAI’s ChatGPT as an option in the Siri digital assistant and is expected to add Gemini, Google’s AI search product, later this year. Cue said Apple also looked at Anthropic, Perplexity, China-based DeepSeek and Grok from Elon Musk’s xAI for this purpose. He said the agreement with OpenAI allows it to add other AI providers to the company’s operating system, including Apple’s own.

Cue also said that large language models — the underlying technology for generative AI — will continue to improve, giving users more reason to change their habits.

Still, he believes Google should remain the default in Safari, saying that he has lost sleep over the possibility of losing the revenue sharing from their agreement. He said Apple’s pact with Google today for regular search still has the most favorable financial terms.

Alphabet shares ended 7.5% lower overnight, while those of Apple also ended 1.1% lower.

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