• Apple plans to reshape Safari to include AI-powered search engines.
• Google's shares dropped significantly following Apple's announcements.
• Apple executive Eddy Cue cited a decline in search traffic on Safari due to AI.
• Potential AI search providers include OpenAI, Perplexity, and Anthropic.
• Apple's current arrangement with Google involves a $20 billion annual deal.

Apple is considering a major revamp of its Safari web browser by incorporating AI-powered search options, a move that could significantly disrupt Google's dominance in the search engine market. Eddy Cue, Apple's senior vice president of services, revealed in court that searches on Safari had dipped for the first time ever due to users increasingly opting for AI search tools, according to Business Insider and Channel News Asia.

As part of the ongoing U.S. Justice Department antitrust case against Alphabet, Cue indicated that Apple is “actively looking at” integrating AI alternatives from companies like OpenAI and Perplexity into Safari. This shift comes as Apple receives approximately $20 billion annually from Google for making its search engine the default on Apple devices, according to Reuters and Bangkok Post.

The market reacted sharply, with Alphabet's shares plunging over 8%, erasing roughly $160 billion from its market capitalization, as investor concerns grew regarding the potential loss of Google's default status on Safari, as noted by India Times and AA.

Cue expressed concerns over the risks of losing the lucrative partnership with Google but acknowledged the increasing shift towards AI as a search alternative. He stated, "The loss of exclusivity at Apple should have very severe consequences for Google," corroborating hints of potential changes in the market dynamics, according to The Hill and India Times.