Apple’s Executive Eddy Queue locked its Alphabet stock when it testified during the US antitrust case against the Alphabet, saying that the volume of Google searches on Apple’s Safari web browser had declined for the first time in more than 20 years. Cue thought that the decline in that amount was reduced to people in order to find information using a new AI-driven tool.
Bombshell’s comments cut Alphabet’s share price by 9% in intraday trading, but then collected some of those losses, now about 6% lower than Cue’s testimony.
Investors are worried that the AI chatbot will eventually replace Google search, which accounts for 55% of Alphabet’s overall revenue, and are thought to be a much larger share of the company’s profits. (Alphabet doesn’t know how much money it is, as it doesn’t break profits by the same segments it reports revenue.) However, it’s hard to try and tease exactly how AI competition affects Google and which rivals are making Google’s sacrifices.
In response to Cue’s testimony, Google, not to mention, issued a statement that it confirmed what Cue said about Safari, implying that investors misinterpret the data. “We continue to see overall query growth in search, including an increase in total queries from Apple devices and platforms,” the company said.
In other words, people are searching for less and more, but they don’t necessarily do that using Apple’s Safari browser. Google also said the use of new search modes is increasing, such as image search using Google lenses and audio-based search. These features are not supported in Safari either. This can mean that people are instead turning to Google’s Chrome browser or Google apps.
Alphabet also commented on the increased use of generated AI to provide a “AI Overview” (Capsule’s answer to search queries rather than a ranked list of links) and its own use of generated AI to provide a search impact. For example, for over a year, Alphabet has argued that AI overviews increase search usage. Independent data from Web Analytics Firms, Sparktoro and Datos appears to confirm this, indicating that the total number of Google searches has increased by more than 20% year-on-year in 2024.
Alphabet also issued a statement in March based on what he said was internal company data for January 2025. The AI overview has increased the number of “commercial searches” where people are trying to buy a specific product or service.
However, Google Executive Sissyfuciao, who oversaw the deployment of Google’s Gemini Chatbot product, testified that Google had declined certain searches for “math and homework” since ChatGpt’s debut in April on the Google Antitrust Trial. These searches usually don’t generate much advertising revenue, but Vidhya Srinivasan, executive in Google’s advertising business, said he believes AI will ultimately nibble on search revenue.
While the overall search volume may be rising, Google may have a bit less of that big pie. Data from Web Analytics Firm StatCounter shows a small but significant decline in Google Search’s global market share since Openai’s ChatGPT debuted in late November 2022. This is the first time since 2015 that Google has fallen below that threshold, below 90% that occurred in the last quarter of 2024.
Statcounter numbers do not directly assess traditional search engine traffic for the use of AI tools such as ChatGPT. That said, during the same period, Microsoft’s Bing may have been incorporating its Bing chatbot and is sending its GPT model from Openai.
Data released earlier this week from Sisirweb, another website tracker, also shows that Google’s market share is down 2% year-on-year. Simarweb’s data shows all traditional search engines that have lost traffic in the last 12 months. (Even so, Sparktoro and Datos figures show that ChatGpt only saw about 1% of the total traffic seen by Google Search in 2024.)
According to the latest data from SimaryWeb, of these new AI tools, ChatGPT has the largest market share, with around 80% of the total AI chatbot usage of 6.5%, Google’s AI tools is 5.6%, X.com’s GROK 2.6%, and confusion is about 1.5%.
And younger people are increasingly searching on social media for product, travel and restaurant recommendations rather than using Google. A Bernstein research report in September 2024 cited two separate surveys as they found that about half of Gen Z consumers would likely use platforms like Tiktok and Instagram as their primary search tools instead of Google.
It is unclear how quickly these trends will eat Google’s revenue. In the first quarter, Google’s search revenue increased by 7%. This was about half of the percentage of these revenues expanding throughout 2024, but still up.
Philipp Schindler, senior vice president and chief business officer at Alphabet, told investors in the company’s first quarter revenue call last month that Alphabet saw “monetization at roughly the same rate” since the launch of the AI overview. However, he also pointed out that since the introduction of AI capsule answers, it has answered questions about click-through rates. And the following morning, Alphabet’s 10Q-second filing revealed that the growth of clicks on Google Search & Other had slowed to 2% from 5% growth in 2024.
JPMorgan analyst Doug Anmuth said in an otherwise optimistic take on Kew’s testimony, “We believe that the AI overview is a factor in slower pay click growth, as it has lower ad loads and more relevant natural search results.” Two studies from marketing companies that help companies increase their presence in search engine results show that the AI overview is a 35% major obstacle to click-through rates compared to traditional searches.
According to testimony from Hsiao’s antitrust trial, Google AD chief Srinivasan was pushing for the inclusion of advertisements in Gemini AI Chatbot Answers as soon as possible to compensate for the final cannibalism of Gemini AI Tools’ final cannibalism. “Writing is on the wall,” Srinavasan was quoted as saying at the October 2024 meeting, according to a memo from that meeting introduced at the trial.
The alphabet is not in danger anytime soon. It is far from the dominant players in search, and with YouTube and its cloud business, it has a diverse revenue base. The search giant still has time to understand how to escape the innovator’s dilemma, but Kew’s testimony is a reminder of the clock ticking.
This story was originally featured on Fortune.com.
