-- But Google's stock rebounded Barron's, Yahoo Finance,
Alphabet shares sink 7% after Apple’s Cue says AI will replace search engines
Combined Summary of CNBC and The Verge Articles
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Eddy Cue warns AI could disrupt Google’s dominance in search — and it’s already starting
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In federal court, Apple SVP Eddy Cue testified that AI services like OpenAI, Anthropic, and Perplexity could soon replace traditional search engines like Google.
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He cited Apple’s first-ever drop in Safari search volume (April 2025), attributing it to users shifting toward AI-powered tools for information.
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Cue emphasized this shift as a technological inflection point, suggesting that AI could do more to disrupt Google’s monopoly than any court ruling.
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Cue defends Apple’s $20 billion annual deal with Google as vital, even as he sees its eventual obsolescence
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Cue described the financial importance of Google’s payments — up to $20 billion/year — for being the default search engine on Safari.
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He admitted that Apple is financially disincentivized from building its own search engine and worries about losing the revenue if Google’s deal is revoked.
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Despite supporting Google in court, he acknowledged AI could “change everything” in the near future, making the current deal less critical over time.
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The DOJ-Google antitrust case is moving toward remedies, with high stakes for both Google and Apple
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A U.S. judge previously ruled that Google illegally maintained a search monopoly, partly through its default placement deals like the one with Apple.
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The DOJ wants structural remedies like spinning off Chrome and syndicating Google’s search index to competitors.
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Google proposes lighter restrictions that let Apple work with other search engines — but preserve some of the current default payment model.
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Markets react sharply to Cue’s testimony — signaling that investors see real threat to Google’s core business
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Alphabet (Google’s parent) stock dropped over 7% after Cue’s remarks, reflecting fears that AI could meaningfully weaken Google’s search ad dominance.
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Apple stock also fell 2%, as investors weighed the risk of losing billions in annual Google payments if courts invalidate or alter the deal.
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This moment marks a convergence of antitrust law, emerging AI capabilities, and platform economics — with potential to reshape how users, companies, and regulators interact with search itself.
OpenAI Backtracks on Plans to Drop Nonprofit Control
Combined Summary of NYT and WSJ Articles
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OpenAI will remain under nonprofit control, abandoning a controversial for-profit restructuring plan
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OpenAI has reversed its plan to shift control from its nonprofit board to investors, choosing instead to operate as a public benefit corporation (PBC) controlled by the original nonprofit.
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The decision follows months of criticism from co-founder Elon Musk, legal pressure from attorneys general in California and Delaware, and pushback from AI safety advocates like Geoffrey Hinton.
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The nonprofit will remain the dominant shareholder and retain authority over board appointments; specific ownership percentages are still being determined.
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The restructuring aims to balance fundraising needs with OpenAI’s founding mission
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The move is designed to offer a clearer governance structure while still supporting OpenAI’s ability to raise capital—particularly a major funding deal with SoftBank worth up to $40 billion, contingent on successful restructuring.
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By shifting from a “capped-profit” LLC model to a PBC, OpenAI joins competitors like Anthropic and X.ai in adopting a hybrid public-good/investor-return model.
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CEO Sam Altman described the decision as a pragmatic compromise that allows the nonprofit to remain mission-focused while unlocking resources to scale.
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Critics view the move as either a meaningful course correction—or a “cosmetic” dodge
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Elon Musk’s legal team called the restructuring a “transparent dodge” that still enables private enrichment while violating OpenAI’s original charitable mission.
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Musk had previously sued to block the restructuring and even led a failed $97 billion bid to acquire OpenAI’s nonprofit parent.
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Legal scholars and regulators expressed cautious optimism, but stressed that the definition and enforceability of “control” remain unclear.
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The debate underscores deep tensions in AI governance and the future of corporate structure
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OpenAI’s struggle reflects a broader industry challenge: balancing long-term public safety and ethical stewardship with the immense capital demands of cutting-edge AI development.
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Altman emphasized that AI is a transformative technology and that its governance should evolve to reflect both social responsibility and financial sustainability.
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This move, if executed as promised, could make OpenAI’s nonprofit one of the largest and most influential charities in the world, with capital to deploy toward public-good initiatives.
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This development marks a critical pivot in OpenAI’s identity and signals a deeper industry reckoning over how AI companies should be structured, funded, and held accountable in an era of exponential technological influence.
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