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Eddy Cue is preventing to avoid wasting Apple’s $20 billion paycheck from Google

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Microsoft’s Bing or DuckDuckGo most likely gained’t disrupt Google’s dominance in search, mentioned Apple senior vp of providers Eddy Cue — however AI providers simply may.

Cue was returning to a courtroom in Washington, DC the place he final testified within the Justice Division’s trial towards Google’s search monopoly in September 2023. Throughout the present cures trial on Wednesday, Cue mentioned that within the time since, well-funded generative AI upstarts have made such important developments that they may finally disrupt that monopoly — maybe extra successfully than the court docket may.

Cue was additionally, nevertheless, there to defend a major supply of Apple’s income: the funds Google gives for default search engine placement on Apple’s Safari browser.

After the 2023 trial, Choose Amit Mehta discovered that Google illegally monopolized the web search market, partially by 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 must be compelled to share beneficial search information with opponents and spin off its Chrome browser, whereas Google (which plans to enchantment the sooner ruling) desires solely restrictions on the offers Mehta deemed unfairly exclusionary. And relatively than barring its Apple deal altogether, it will make Google give Apple extra flexibility to signal further default search agreements throughout its numerous units or in non-public shopping mode.

Cue argued Wednesday that speedy AI developments imply the antitrust risk Mehta recognized is shrinking. For the primary time in 22 years, Cue mentioned, Apple noticed search quantity decline in its Safari browser final month — a aspect impact of customers in search of extra info from AI chatbots. The DOJ, unsurprisingly, disagrees. It’s not unusual for technological improvement 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 difficulty.

Apple has quite a lot of pores and skin within the sport right here — the DOJ beforehand revealed it rakes in $20 billion in funds from Google yearly. Google’s proposed cures may scale 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 improper after which let it lower your expenses at Apple’s expense, he mentioned, “simply appears loopy to me.”

Google may even preserve its prime Safari placement and not using a deal within the quick time period, Cue mentioned. “We don’t actually have a alternative right this moment,” he testified. Even when Apple may minimize a brand new default cope with one other firm, Google remains to be the very best service accessible for purchasers, so that they’d most likely search it out — and Apple wouldn’t get a minimize. Cue mentioned he’s “misplaced quite a lot of sleep” over the prospect of shedding the Google deal, and warned it will influence Apple’s means to make new merchandise.

Cue additionally advised Mehta he “can’t say I disagree” together with his evaluation that Apple was disincentivized from constructing its personal search engine due to its cope with Google. However, he added, “we will’t do the whole lot,” and since Google is basically good at what it does, Apple prefers to deal with areas the place it might probably supply distinctive worth.

There’s “a lot higher potential as a result of there are new entrants which are attacking the issue otherwise”

AI may finally change all of this, Cue testified. Apple is already exploring including AI search choices, although it acknowledges they’ll’t but substitute conventional search engines like google. “So far, they’re simply not ok,” he mentioned.

Cue mentioned “ok” may come prior to he anticipated. He mentioned there’s “a lot higher potential as a result of there are new entrants which are attacking the issue otherwise.” Massive language mannequin (LLM) AI firms haven’t constructed a strong sufficient search index to substitute for Google but, he mentioned, however combining an LLM with search may allow them to use a smaller index successfully quickly.

Although he’s backing Google’s battle to maintain its search offers, he appeared to acknowledge that the DOJ’s proposal to syndicate Google’s search index may get AI rivals on top of things even quicker.

Cue cautioned the decide that tech isn’t like different industries, and giants usually fall even with out court docket intervention. “After I obtained to Silicon Valley, the entire greatest firms, or probably the most profitable firms, both don’t exist right this moment or are considerably smaller and fewer impactful,” Cue mentioned, pointing to firms like HP, Solar Microsystems, and Intel. Within the know-how discipline, being an incumbent won’t supply the identical advantages it does in different markets. “We’re not an oil firm, we’re not toothpaste. These are issues which are going to final eternally,” he mentioned. “It’s possible you’ll not want an iPhone 10 years from now.” After practically 4 many years at Apple, Cue now sees AI as “an enormous technological shift.”

Placing himself within the decide’s sneakers, Cue advised Mehta, “we’re fortunate, as a result of actually, if AI had not come about, I don’t know what you would do.” That’s as a result of, he defined, “till there are really aggressive merchandise, folks will preserve utilizing the very best one.”



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