Apple is developing a new AI-powered search feature called World Knowledge Answers for Siri, aiming to compete with OpenAI and Google in AI search, with potential market impacts anticipated.

Apple to Integrate AI-Powered Search in Siri Upgrade

U.S. equities are expected to react to Apple's announcement of its plans to integrate an AI-powered search feature, "World Knowledge Answers," into Siri by Spring 2026. This move is seen as a direct challenge to OpenAI and Google in the AI search arena.

The AI-Powered Siri Upgrade

Apple plans to launch its AI-powered search feature in Spring 2026. This upgrade will enable Siri to pull useful answers from across the internet, similar to ChatGPT or Google's AI Overviews. The upgraded Siri will feature an interface combining text, photos, videos, and local information with AI-powered summarization. The company is testing large language models, including Google's Gemini AI and Anthropic's Claude, while also training its own models. Apple will use its own technology for user data privacy.

Market Reaction and Analysis

The announcement is expected to be bullish for Apple (AAPL), as a successful AI upgrade could increase user engagement and ecosystem stickiness. A Bloomberg Intelligence report suggests that AI enhancements could boost service revenue by 15%. However, the delayed rollout of major AI upgrades until 2026 risks ceding ground to rivals. The initial market reaction saw Apple's stock rise 3.5%, but it closed down 2.5%, reflecting investor concerns about tariff-related costs and regulatory risks.

Analysts project a forward P/E ratio of 26.95, which, while elevated, aligns with its historical premium for innovation-driven growth.

Conversely, the news could be potentially bearish for competitors like Google (GOOG) and OpenAI if Apple's offering proves competitive. The integration of Google's Gemini into Siri, despite Apple's initial preference for Anthropic's Claude AI, highlights the intense competition in the AI space. According to a Bloomberg report, Google secured the deal by offering better financial terms after Anthropic requested more than $1.5 billion per year.

Broader Context and Implications

Apple's move towards AI-driven search represents both a defensive maneuver and an aggressive bid for dominance. The global AI market is projected to expand significantly, with AI-driven search emerging as a pivotal battleground. The company's ecosystem-centric strategy mirrors its historical playbook, where hardware-software integration has driven loyalty and monetization. The tool’s integration into Safari and Spotlight underscores Apple’s intent to embed AI search deeply within its ecosystem, with users accessing World Knowledge Answers seamlessly across iOS, macOS, and potentially watchOS by 2026, creating a closed-loop experience that rivals platforms like OpenAI’s ChatGPT or Perplexity AI.

Expert Commentary

Analysts like Daniel Ives of Wedbush suggest that Apple's ecosystem-driven AI strategy, despite being slower than rivals, could outperform in the long run by prioritizing privacy and seamless integration.

Looking Ahead

Investors will be closely watching the development and rollout of Apple's AI-powered search feature. Key factors to monitor include the performance of the integrated Gemini AI, user adoption rates, and the impact on Apple's services revenue. Upcoming economic reports, company earnings, and policy decisions will also play a crucial role in shaping the market landscape.

Apple's Q3 2025 financial performance showed a 10% year-over-year increase in revenue to $94 billion, with diluted earnings per share up 12% to $1.57. The company's $55 billion in cash reserves provide a buffer for R&D and strategic acquisitions.