Alphabet Shares Plunge 7% amid Apple AI Search Talks

Alphabet, Google's parent company, saw its shares plunge over 7% after Apple executive Eddy Cue testified in a federal antitrust trial that Google search traffic on Apple products had declined for the first time in two decades, attributing the drop to rising competition from AI-powered alternatives like ChatGPT and Perplexity. Cue also revealed that Apple is considering integrating additional AI search options, including talks with Perplexity AI and possible future inclusion of models such as OpenAI's ChatGPT and Anthropic's Claude on Apple devices. These developments threaten Alphabet's lucrative deal, reportedly worth around $20 billion in 2022, that makes Google the default search engine on Apple’s Safari browser. The testimony underscores a broader shift in user behavior and intensifies investor concerns over the disruption posed by AI-driven search technologies to traditional search engines. Additionally, Alphabet's stock decline was compounded by technical market factors and heightened anxieties about the company's future growth as its dominant search model faces increasing disruption. The events signal a potential transformation in the search engine landscape and cast uncertainty over Alphabet's longstanding revenue streams.