Apple's AI-Powered Search Engine, Nvidia's Chinese Challenger Tumbles, Alphabet Shares Surge

Apple plans to launch its own web search tool powered by AI and Siri, benefiting Alphabet's parent company Google. Shares of Nvidia's Chinese challenger Cambricon plummet on profit taking after an August rally. The moves come amid Apple's increased focus on AI and Google's recent antitrust win.

Apple Inc. is set to revolutionize its digital assistant and web search capabilities with the upcoming launch of an AI-powered search tool, codenamed "World Knowledge Answers." This innovative service, set to debut next year, aims to integrate seamlessly with Siri and potentially extend to Safari and Spotlight search, offering users the ability to search for information across the internet. Apple's decision to explore third-party AI models for Siri is part of a broader strategy to stay competitive in the rapidly evolving AI landscape [1].

The development of World Knowledge Answers marks a significant step in Apple's long-delayed overhaul of Siri. The new search system, which will utilize large language models (LLMs) and generative AI, is designed to provide users with a more comprehensive and accurate search experience. Apple has been working on this project for some time, with various teams contributing to the initiative, including the Siri group under Craig Federighi, the AI division led by John Giannandrea, and the services unit run by Eddy Cue [1].

Meanwhile, Nvidia's dominance in the AI chip market is under threat from a confluence of factors: rising competition from U.S. rivals, the fragmentation of the AI chip market by hyperscalers, and China’s aggressive push for self-sufficiency in semiconductor technology. These dynamics raise critical questions about the long-term sustainability of Nvidia’s valuation and the vulnerabilities embedded in its supply chain [2].

Nvidia’s AI chip supply chain is deeply intertwined with global geopolitical tensions. The company relies on a tripartite ecosystem: NVIDIA for design, ASML for EUV lithography equipment, and TSMC for manufacturing [2]. This concentration creates significant risks. For instance, U.S. export controls on advanced EUV machines to China have stifled TSMC’s ability to produce cutting-edge chips for Chinese clients, indirectly limiting the scalability of domestic alternatives [3]. Meanwhile, China’s control over 98% of gallium—a critical material for semiconductor production—has introduced a potential chokehold on global supply chains [4].

The U.S.-China trade war has further exacerbated these vulnerabilities. In 2025, Nvidia faced an $8 billion revenue hit due to export restrictions on its H20 chips to China, a market that historically contributed 13% of its revenue [5]. While the Trump administration’s partial reversal of these restrictions in July 2025 allowed H20 sales to resume, the company now shares 15% of its China revenue with the U.S. government, eroding gross margins by 8–10 percentage points [6]. This regulatory uncertainty has forced Nvidia to diversify its geographic footprint, with partnerships in Saudi Arabia and Europe now accounting for a growing share of its growth strategy [7].

China’s push for semiconductor self-reliance has accelerated under U.S. export controls and state-led industrial policies. By 2025, the country’s AI chip localization rate has surged to 55%, up from 17% in 2023 [8]. Huawei’s Ascend 910D, for example, matches the H100’s FP16 performance (1.2 PFLOPS) and offers a 44% lower total cost of ownership (TCO) for Chinese enterprises [9]. While the 910D lags in memory bandwidth (800 GB/s vs. H100’s 3 TB/s), its adoption by firms like ByteDance and SenseTime signals growing traction in domestic markets [10].

Cambricon, another Chinese contender, has seen a 44x revenue surge in H1 2025, driven by government subsidies and partnerships with AI models like DeepSeek [11]. The company’s Siyuan 690 chip is now competing directly with the H100, and Bernstein forecasts Nvidia’s market share in China could drop to 54% in 2025 from 66% in 2024 [12]. These developments are compounded by China’s investment in RISC-V architectures and DUV lithography, which aim to bypass U.S. technological dominance [13].

The 2025 antitrust ruling against Google represents a pivotal moment for Alphabet Inc., offering a nuanced balance between regulatory oversight and innovation. While critics have dismissed the decision as a “slap on the wrist,” a closer examination reveals a strategic win for Alphabet’s AI-driven ambitions and long-term investor value. By avoiding structural penalties and retaining critical assets like Chrome and Android, Alphabet has preserved its foundational advantages while navigating the evolving AI landscape. This ruling, however, is not without its constraints—behavioral remedies and data-sharing obligations will shape [3].

In conclusion, Apple's AI-powered search tool represents a significant advancement in the company's digital assistant and web search capabilities. The integration of World Knowledge Answers into Siri and other services promises to provide users with a more accurate and comprehensive search experience. As Apple continues to innovate in the AI space, investors can expect to see further developments and enhancements in the company's digital assistant and web search offerings. Meanwhile, Nvidia faces significant challenges in maintaining its market dominance amidst rising competition and geopolitical uncertainties.

References:
[1] https://www.ainvest.com/news/apple-develops-ai-powered-search-tool-siri-safari-spotlight-2509/
[2] https://www.ainvest.com/news/nvidia-dominance-ai-emerging-threats-china-sufficiency-drive-2508-82/
[3] https://www.ainvest.com/news/google-antitrust-ruling-strategic-win-ai-driven-growth-investor-2509/