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Apple Store In San Diego
People walk by an Apple store at the Westfield UTC shopping center in San Diego, California (Kevin Carter/Getty Images)

A single comment from an Apple exec about AI search is upending the tech pecking order

Eddy Cue’s testimony shows that Apple sees the shift to AI-powered search as inevitable.

Jon Keegan

Apple bigwig Eddy Cue’s comments Wednesday about potentially adding AI-powered search to his company’s Safari browser could be a massive blow for Google’s decades-long dominance in web searches. Investors ran for the hills, sending Google’s stock down 8.4% in recent trading, pulling the broader market down with it.

Cue, Apple’s senior vice president of services, said while testifying in the Department of Justice case against Google that Apple was “actively looking at” adding AI-powered search to its Safari browser. Cue said OpenAI, Perplexity, and Anthropic were possible options to add to Safari in the future, according to the report: “We will add them to the list — they probably won’t be the default.” 

An 8% drawdown in Google stock reflects a staggering roughly $150 billion worth of market cap destroyed in a span of minutes. Shares of Apple were recently down 1.8%. The S&P 500 also dropped on the news, falling about 0.6% from peak to trough before recovering some ground to become barely green for the day as of 12:37 p.m. ET.

Another sign that AI may be making seismic changes to the web search industry: Bloomberg reports that Cue also said today that Apple saw in-browser searches fall for the first time in April, which he suspected was due to AI. 

Court documents in 2024 revealed that Google paid Apple $20 billion in 2022 to be the default search engine in the Safari browser. That deal was ruled to be illegal last summer. 

$20B
Paid to apple by Alphabet for search

It’s unclear whether a shift to AI search results would box Google out of Apple’s browser search, but to put the amount into context, Apple generated $394 billion of revenue in 2022, so a $20 billion payment would be the equivalent of about 5% of that total.

While Google’s search business generated $50.7 billion last quarter, it’s also investing heavily in AI. Alphabet CEO Sundar Pichai recently said he hopes to reach a deal with Apple to include the model on iPhones this year. 

Cue’s comments appear to show that within Apple, execs see the shift to AI-powered search as inevitable. 

Cue testified, “There’s enough money now, enough large players, that I don’t see how it doesn’t happen.”

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Rani Molla

Jefferies downgrades Apple to “underperform,” calls iPhone sales expectations “excessive”

Sure, Apple’s latest iPhone is selling better than some previous models, but that’s already reflected in the stock, Jefferies analysts wrote in a note today. In it they downgraded the stock to “underperform” and kept the price target roughly flat at $205.

The analysts argue the sales bump stems from high trade-in values and the lack of price hikes, rather than “new form factor or tech innovations.” As we recently noted, it could also have something to do with a natural upgrade cycle rather than consumers going nuts over NITS.

The analysts say the positive sales momentum for the iPhone 17 has engendered “excessive expectations” for the replacement cycle as well as for the company’s upcoming foldable iPhone.

“We do not doubt AAPL will be able to make the most beautiful foldable phone in the market, but the question is the TAM [total addressable market] of a US$2K phone,” they wrote.

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Rani Molla

JPMorgan reiterates “underweight” rating after Tesla delivery beat

While Tesla delivered a massive delivery beat yesterday, JPMorgan analyst Ryan Brinkman wants to remind investors to put that beat into context:

  1. He noted that the surge was likely a temporary one thanks to pulled-forward demand by consumers hoping to capitalize on the $7,500 tax credit that ended September 30. That pull forward will necessarily mean fewer purchases later, and the end of the tax credit “ultimately will negatively impact Tesla deliveries as soon as October 1.” He added that the analyst consensus still expects Tesla’s full-year sales to decline.

  2. Tesla’s beat, Brinkman said, was in part due to analysts having dramatically lowered their previous estimates amid falling sales. While the nearly 500,000 deliveries in Q3 were about 12% higher than the analyst consensus right before the numbers came out, he noted that analyst expectations have been grinding lower for years. He pointed out that Street estimates for Q3 2025 deliveries peaked at 1.1 million in 2022. While the company missed that peak estimate by 56%, the stock is up 81% in the intervening years.

JPMorgan raised its third-quarter earnings-per-share and free cash flow estimates on the delivery numbers, but reiterated its “underweight” rating for the stock.

tech
Rani Molla

OpenAI’s Sora has bumped Google’s Gemini and OpenAI’s ChatGPT from the top of the App Store

OpenAI’s AI-only social media app, Sora, launched three days ago and is already No. 1 on the US free App Store, where it has displaced regular favorite AI apps Gemini from Google and ChatGPT, OpenAI’s main app. It’s an especially impressive feat given that for now the highly addictive, legally murky app is invite-only.

Of course, many a buzzy app has surged up the App Store ranks only to fizzle over time. We’ll see what happens with Sora.

tech
Jon Keegan

OpenAI’s hot Sora video app is a copyright lawsuit waiting to happen

OpenAI has generated some serious buzz surrounding its new Sora video generation app. The app is currently No. 3 on the iOS free app leaderboards, even though it’s invitation-only for the time being.

But users have been flooding social media with videos generated by Sora, and in addition to a “Skibidi Toilet” Sam Altman and the OpenAI CEO dressed as a Nazi, the app is able to create videos featuring iconic characters from Disney, Nintendo, and Paramount Skydance.

On the system card for the Sora 2 AI model (which powers the Sora app), OpenAI says it was trained on things found on the internet:

“Sora 2 was trained on diverse datasets, including information that is publicly available on the internet, information that we partner with third parties to access, and information that our users or human trainers and researchers provide or generate.”

This seems like an invitation for a big copyright lawsuit, along the lines of the one Disney, Dreamworks, and NBCUniversal recently filed against AI image generator Midjourney.

But OpenAI is trying to flip the responsibility of protecting copyrighted material to the intellectual property owners themselves. According to The Wall Street Journal, OpenAI is allowing copyrighted material in Sora by default, unless copyright holders opt out of the service.

The courts will have to decide if this novel approach to intellectual copyright law works, but government regulators may not be that big of a problem, as Altman has made sure OpenAI is in the good graces of the Trump administration. If OpenAI has to pay up to copyright holders after a lawsuit, what’s a few billion dollars here or there when you’re raising so much capital?

OpenAI’s AI video app stirs copyright questions, pumping out videos of Mario and Pikachu

OpenAI’s AI video app stirs copyright questions, pumping out videos of Mario and Pikachu

On the system card for the Sora 2 AI model (which powers the Sora app), OpenAI says it was trained on things found on the internet:

“Sora 2 was trained on diverse datasets, including information that is publicly available on the internet, information that we partner with third parties to access, and information that our users or human trainers and researchers provide or generate.”

This seems like an invitation for a big copyright lawsuit, along the lines of the one Disney, Dreamworks, and NBCUniversal recently filed against AI image generator Midjourney.

But OpenAI is trying to flip the responsibility of protecting copyrighted material to the intellectual property owners themselves. According to The Wall Street Journal, OpenAI is allowing copyrighted material in Sora by default, unless copyright holders opt out of the service.

The courts will have to decide if this novel approach to intellectual copyright law works, but government regulators may not be that big of a problem, as Altman has made sure OpenAI is in the good graces of the Trump administration. If OpenAI has to pay up to copyright holders after a lawsuit, what’s a few billion dollars here or there when you’re raising so much capital?

Rani Molla
10/2/25
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