For years, one of the quietest power arrangements in tech was the deal between Google and Apple. Google paid Apple somewhere between $15 billion and $20 billion a year to remain the default search engine on every iPhone and Safari browser in the world. It was the most expensive handshake in Silicon Valley history, and it made perfect sense as long as people were still typing questions into search boxes.
They are doing that less and less.
In the first quarter of 2026, Google searches originating from Safari on iOS dropped by an estimated 8 percent year over year. That might sound small until you understand the scale: Apple devices account for roughly 57 percent of all US smartphone usage, and the majority of those users were hitting Google by default every single day. An 8 percent decline in that pool is tens of billions of searches per year simply evaporating from Google’s ecosystem.
Where are they going? Partly to ChatGPT, which added a direct browser search feature in late 2024. Partly to Perplexity, which has been building quiet momentum among professionals who want cited, conversational answers instead of a page of blue links and ads. Partly to the AI features built directly into Apple’s own operating system, which can answer a growing range of queries without opening a browser at all.
What the $20 Billion Was Actually Buying
The Google-Apple deal was not just about convenience. It was about distribution. Every Google search on an iPhone generated advertising revenue that the two companies split. It funded a significant portion of Apple’s services revenue, which Wall Street values at a premium because it is recurring and high-margin. It kept Google dominant in mobile search, which is where the majority of all searches now happen. Both companies had every incentive to maintain the arrangement indefinitely.
The Department of Justice saw the deal differently. In its antitrust case against Google, which it won in August 2024, the judge found that Google had used default agreements like this one to illegally maintain its search monopoly. The remedy phase is still ongoing, and one of the proposed remedies is forcing Google to end default search deals entirely.
So Google is simultaneously watching its most valuable distribution channel face a legal threat and watching the behaviour of users on that channel change underneath it.
Apple’s Position Is Stranger Than It Looks
Apple is not passive in this story. It has been building its own AI capabilities aggressively, partnering with OpenAI to integrate ChatGPT into Siri, and developing its own on-device models. Apple Intelligence, launched with iOS 18, handles a wide range of queries directly on the device without sending data to any server.
Every query that Apple Intelligence answers is a query that does not go to Google. Every conversation that routes to ChatGPT through Siri is a conversation Google does not see. Apple has financial reasons to keep the Google deal alive, but it is simultaneously building the infrastructure that makes the deal less necessary.
If the DOJ forces an end to default search agreements, Apple will need to either build its own search capability or run an auction for the default spot, which Bing and others would enter. Either scenario is a significant shift in the economics of the internet.
What This Means for the Rest of Us
The advertising model that funds the internet, the system where you search for something, get results surrounded by ads, and the ad revenue pays for content, journalism, and services, is quietly breaking down. AI answers do not work the same way. You ask a question, you get an answer, and there are no sponsored links alongside it. Someone is paying for the compute that generates the answer, but it is not advertisers paying per click the way they have for twenty years.
The revenue models of the next phase of the internet have not been figured out yet. That is not a small detail. It is the central economic problem of the AI transition, and nobody has a credible solution that works at scale.
Google paid $20 billion a year for a future that looked very different from the one that is arriving.