Microsoft’s Bing or DuckDuckGo in all probability received’t disrupt Google’s dominance in search, stated Apple senior vice chairman of companies Eddy Cue — however AI companies simply may.
Cue was returning to a courtroom in Washington, DC the place he last testified in the Justice Department’s trial against Google’s search monopoly in September 2023. Through the present cures trial on Wednesday, Cue stated that within the time since, well-funded generative AI upstarts have made such important developments that they might finally disrupt that monopoly — maybe extra successfully than the court docket may.
Cue was additionally, nonetheless, there to defend a major supply of Apple’s income: the funds Google affords for default search engine placement on Apple’s Safari browser.
After the 2023 trial, Decide Amit Mehta found that Google illegally monopolized the online search market, partly by way of agreements just like the Safari deal. For the final two and a half weeks, Google and the DOJ have pitched Mehta on what he ought to (or shouldn’t) do to repair the issue. The DOJ says Google ought to be compelled to share valuable search data with competitors and spin off its Chrome browser, whereas Google (which plans to enchantment the sooner ruling) needs solely restrictions on the offers Mehta deemed unfairly exclusionary. And relatively than barring its Apple deal altogether, it will make Google give Apple more flexibility to signal extra default search agreements throughout its varied units or in non-public looking mode.
Cue argued Wednesday that speedy AI developments imply the antitrust risk Mehta recognized is shrinking. For the primary time in 22 years, Cue stated, Apple noticed search volume decline in its Safari browser final month — a aspect impact of customers searching for extra data from AI chatbots. The DOJ, unsurprisingly, disagrees. It’s not unusual for technological growth to outpace the sluggish trudge of the court docket system, however the authorities says that tempo isn’t quick sufficient to repair a persistent market situation.
Apple has a number of pores and skin within the sport right here — the DOJ beforehand revealed it rakes in $20 billion in payments from Google yearly. Google’s proposed cures may cut back it, however they might additionally open up Apple’s choices and protect a lot of its income movement. The DOJ’s, in the meantime, may wipe out that money movement altogether. Cue appeared bewildered that Apple may get the quick finish of the stick for a punishment supposedly inflicted on Google. The concept the court docket may resolve Google did one thing flawed after which let it get monetary savings at Apple’s expense, he stated, “simply appears loopy to me.”
Google may even preserve its prime Safari placement with out a deal within the quick time period, Cue stated. “We don’t actually have a alternative in the present day,” he testified. Even when Apple may minimize a brand new default take care of one other firm, Google remains to be the most effective service obtainable for patrons, in order that they’d in all probability search it out — and Apple wouldn’t get a minimize. Cue stated he’s “misplaced a number of sleep” over the prospect of shedding the Google deal, and warned it will influence Apple’s skill to make new merchandise.
Cue additionally instructed Mehta he “can’t say I disagree” together with his evaluation that Apple was disincentivized from constructing its personal search engine due to its take care of Google. However, he added, “we will’t do the whole lot,” and since Google is basically good at what it does, Apple prefers to concentrate on areas the place it might probably provide distinctive worth.
There’s “a lot better potential as a result of there are new entrants which might be attacking the issue another way”
AI may ultimately change all of this, Cue testified. Apple is already exploring adding AI search options, although it acknowledges they will’t but change conventional serps. “So far, they’re simply not ok,” he stated.
Cue stated “ok” may come prior to he anticipated. He stated there’s “a lot better potential as a result of there are new entrants which might be attacking the issue another way.” Massive language mannequin (LLM) AI corporations haven’t constructed a sturdy sufficient search index to substitute for Google but, he stated, however combining an LLM with search may allow them to use a smaller index successfully quickly.
Although he’s backing Google’s struggle to maintain its search offers, he appeared to acknowledge that the DOJ’s proposal to syndicate Google’s search index may get AI rivals in control even quicker.
Cue cautioned the decide that tech shouldn’t be like different industries, and giants usually fall even with out court docket intervention. “After I acquired to Silicon Valley, the entire finest corporations, or probably the most profitable corporations, both don’t exist in the present day or are considerably smaller and fewer impactful,” Cue stated, pointing to corporations like HP, Solar Microsystems, and Intel. Within the expertise area, being an incumbent won’t provide the identical advantages it does in different markets. “We’re not an oil firm, we’re not toothpaste. These are issues which might be going to final perpetually,” he stated. “You may not need an iPhone 10 years from now.” After almost 4 a long time at Apple, Cue now sees AI as “an enormous technological shift.”
Placing himself within the decide’s footwear, Cue instructed Mehta, “we’re fortunate, as a result of actually, if AI had not come about, I don’t know what you may do.” That’s as a result of, he defined, “till there are really aggressive merchandise, individuals will preserve utilizing the most effective one.”