Alphabet shares plunge as Apple looks at adding AI search integration from Perplexity
Published: 11:34 07 May 2025 EDT
Alphabet Inc (NASDAQ:GOOG) shares fell 7% after Apple Inc (NASDAQ:AAPL, ETR:APC) was revealed to have started talks with artificial intelligence startup Perplexity AI about adding search functions to iPhones.
Other AI chatbot functions could also potentially be added.
Apple has been “pretty impressed with what Perplexity has done so we've started some discussions,” said Eddy Cue, Apple's senior vice president of services, during questioning at Google's search monopoly trial.
He also said OpenAI's ChatGPT and Anthropic's Claude were other options, according to The Wall Street Journal.
This follows searches in Apple's Safari browser falling last month, something that “never happened in 20 years,” Cue said.
Google owner Alphabet Inc (NASDAQ:GOOG) is believed to have paid around $20 billion to Apple in 2022 for its search engine to be the default search option in Safari.
Last week at the trial, Alphabet CEO Sundar Pichai said he expected to agree a deal with Apple to integrate Google's Gemini into the iPhone, with the service to be rolled out by the end of 2025.
Apple has already integrated OpenAI’s ChatGPT as part of its Apple Intelligence feature, with Pichai saying Cook had told him that more third-party AI models be added later this year.
Under the current ChatGPT integration, Apple's 'digital voice assistant' Siri automatically asks for permission to use the AI chatbot to answer more complex questions, analyze photos and generate images based on text.
Alphabet class A shares dropped 7.1% to $151.62 and Apple fell 2.1% to $194.32 after the Perplexity comments were published.
