Eddy Cue, Apple’s senior vice president of internet software and services, made a more impassioned case against search engines. His remarks came during a keynote address at the South By Southwest (SXSW) conference in Austin, Texas. On March 12, 2018, he announced that AI-based search engines would soon become ubiquitous and render today’s AI-agnostic search engines like Google obsolete. His comments have since rocked the market, causing Apple and Alphabet shares to plummet.
Cue’s remarks were widely circulated by Bloomberg on May 7, 2025, restarting jockeying due to competitive pressures and the FAA’s stimulative idea on how search is changing. Perhaps like no other feature announcement, he framed the transformative potential of AI, pitching that this new capability could make traditional search engines feel outdated. We expect that this declaration did not leave many investors shrugging their shoulders about the long-term viability of current partnerships, especially the one between Apple and Google.
The timing of Cue’s statement coincides with heightened scrutiny of Google’s business practices. A U.S. District Court judge recently ruled that Google had illegally dominated ad-tech markets, and the court is now determining penalties or actions against the tech giant. At the crux of this case, however, is Google’s strategy. They spend billions to enter deals with companies like Apple to make sure they’re the default search engine on the overwhelming majority of devices. Beyond just this dynamic comes a mood of skepticism on both sides about the long-term sustainability of their relationship, going forward.
Eddy Cue’s assertion that AI could supplant standard search engines has fueled uncertainty about Apple’s receiving payments from Google. Taken together, these comments suggest a significant shift in the competitive landscape. AI-driven alternatives may not only randomly show up — they may actually succeed. Investors are extremely twitchy to such news, because it goes straight to core revenue generation and market positioning of both companies.
After Cue’s announcements, Alphabet and Apple both saw significant drops in the price of their shares. Investors jumped at the news, worried about the effect these forecasts would have on future profitability and the strategic plan for both companies. The rapid decline highlights the extreme volatility that exists within tech stocks, particularly when directly linked to market moving comments from powerful C-Suite level Executives.