(Reuters) -Apple's plan to revamp its Safari web browser by adding AI-powered search options is a big blow to Google, whose shares tumbled as the move could strike at the heart of its lucrative search advertising business.

Apple executive Eddy Cue offered testimony at an antitrust case against Alphabet on Wednesday, saying the iPhone maker was "actively looking at" reshaping Safari, a source familiar with the matter told Reuters.

Cue also said Apple would add AI search providers, including OpenAI and Perplexity AI, as search options in the future, Bloomberg reported.

The news pushed Alphabet shares down 7.6%, wiping off more than $150 billion from its market value. Apple stock also fell after Cue said searches on Safari fell for the first time last month due to users increasingly turning to AI.

The commentary suggested that a seismic shift in search is around the corner and not years away, threatening Google's once impenetrable moat in the search business.

To be sure, Google is not defenseless. It has introduced an "AI mode" on its search page to retain its millions of users from going away to other AI models.

The company hopes to enter an agreement with Apple by the middle of this year to include its Gemini AI technology on new phones, CEO Sundar Pichai said in a testimony at an antitrust trial last month.

Google is the default search engine on Apple's browser, a coveted position for which it pays Apple roughly $20 billion a year, or about 36% of its search advertising revenue generated through the Safari browser, analysts have estimated.

"The loss of exclusivity at Apple should have very severe consequences for Google even if there are no further measures," D.A. Davidson analyst Gil Luria said.

"Many advertisers have all of their search advertising with Google because it is practically a monopoly with almost 90% share. If there were other viable alternatives for search, many advertisers could move much of their ad budgets away from Google," Luria said.

(Reporting by Jody Godoy in Washington and Arsheeya Bajwa and Aditya Soni in Bengaluru; Editing by Sayantani Ghosh, Anil D'Silva and Arun Koyyur)