Alphabet stock fell sharply after Bloomberg reported that an Apple executive’s testimony pointed to artificial intelligence taking market share from traditional search.

Eddy Cue, Apple’s senior vice president of services, testified in a Department of Justice lawsuit against Google that searches in Apple browsers fell for the first time as people turn to AI for their search queries, according to Bloomberg.

This comes as the Justice Department investigates a longstanding partnership between Apple and Alphabet, in which Alphabet pays billions for Apple to use Google as its default search partner.

Apple, Alphabet, and the Justice Department didn’t respond to requests for comment.

Shares of Alphabet closed down 7.3% as the testimony fueled investor concerns that Google might lose its crown as the king of search. Rivals such as ChatGPT, Perplexity AI, and Meta AI offer increasingly popular alternatives.

In 2024, Alphabet added a warning to the risk section of its 10-K annual report. “Other companies may develop AI products and technologies that are similar or superior to our technologies or more cost-effective to develop and/or deploy,” the company said in the filing.

Melius Research analyst Ben Reitzes rates Alphabet as a Hold with a $166 price target. He wrote in a note on Wednesday that “today could be a historic turning point in Alphabet sentiment.”

“Just trust your eyes and ears—people are going to ChatGPT (and others) for search-equivalent queries more and more,” Reitzes said.

Meanwhile, in August, a U.S. judge ruled that Google was a monopolist in general search services and general text advertising. One potential remedy to that search monopoly could prevent the exclusive agreements that have made Google the default search engine on different devices, including the iPhone.

Shares of Apple, whose profits would take a hit were it to lose the Google search deal, were down 1.1% Wednesday.

Bloomberg also reported on Wednesday that Cue wants Google to remain the default for Safari. But Cue said Apple has had discussions with Perplexity to add the AI search company’s offering to Safari, as well.

Perplexity didn’t respond to a request for comment.

Apple and ChatGPT-parent OpenAI announced a partnership in June. At the time, Apple said it would begin integrating ChatGPT into experiences within iOS, iPadOS, and macOS, allowing users to access ChatGPT’s capabilities.

News Corp, the owner of Barron’s publisher Dow Jones, has sued Perplexity AI alleging copyright infringement. News Corp also signed a multi-year partnership with OpenAI in March 2024.