
Shares in Google parent Alphabet plunged more than 7% on Wednesday after an Apple executive told a federal court that the search engine鈥檚 traffic fell on Apple products last month.
Eddy Cue, Apple鈥檚 senior vice-president of services, testified at an antitrust trial in Washington that Google search volume was losing traffic to AI alternatives such as ChatGPT or Perplexity, according to US media reports.
鈥淭hat has never happened in 20 years,鈥 legal news outlet MLex quoted him as saying.
Cue was giving testimony in a trial in which US Judge Amit Mehta will determine how Google must address his landmark ruling last year that it operates an illegal monopoly in online search.
The Apple executive鈥檚 remarks saw Google鈥檚 market capitalisation wiped of US$140 billion since the close of trading on Wall Street on Tuesday.
The marathon court case has revealed that Google pays Apple tens of billions of dollars every year in a revenue sharing agreement in which Google鈥檚 search engine is set as the default on Apple鈥檚 Safari browser.
Markets were also rattled by Cue鈥檚 comment that 鈥渙ver the coming year we will add other [AI] choices to the search engine choice in the browser, because I think those products are getting better and better鈥, according to MLex.
The testimony backed Google鈥檚 argument that the emergence of AI has begun a new era in how people get information online, with its search engine now facing new rivalry from AI chatbots.
US government attorneys have urged Judge Mehta to force Google to sell off its Chrome browser, arguing that artificial intelligence will actually only ramp up the tech giant鈥檚 online search dominance.
Another option is that the judge, in a decision expected in August, will order an end to the payouts from Google to Apple and others for the default position on devices.
Cue told the court this would have a significant impact on Apple鈥檚 ability to invest in new products and services.
-Agence France-Presse
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