The emergence of generative AI has propelled Microsoft and NVIDIA to the seat, each having briefly tasted the coveted world’s most valuable company crown, with over $3 trillion in market capitalization.
However, Apple seemingly kept the AI bubble at arm’s length, sticking to CEO Tim Cook’s “not first, but best” mantra. As you may know, Apple often attempts to stand out from the masses by developing well-crafted products rather than rushing to be the first in the market with a new product.
As is the case with Apple Intelligence. The iPhone maker unveiled its AI strategy — Apple Intelligence late last year to compete with OpenAI’s ChatGPT, Microsoft’s Copilot, and Google’s Gemini.
Interestingly, the AI strategy showed great promise at launch, propelling Apple to become the world’s most valuable company ahead of Microsoft and NVIDIA with over $3 trillion in market valuation.
However, a report highlighted concerns by Apple insiders, indicating that Apple Intelligence could be two years behind OpenAI’s ChatGPT. Now, a new report by Bloomberg’s Mark Gurman sheds more light on issues riddling Apple’s AI strategy.
Apple Intelligence might already be a flop before hitting broad availability
Apple unveiled its AI strategy in June 2024, and it features exciting features, including writing tools, voicemail transcriptions, Genmoji, and the Image Playground app.
However, its release has been somewhat of a slow burn, rolling out in waves, potentially rendering the entire plot redundant.
Apple is seemingly playing it safe with AI, and for a good reason too. Generative AI has been riddled with critical issues, including security and privacy, which has prompted most users to refrain from leveraging its next-gen capabilities.
On the other hand, OpenAI’s ChatGPT is enjoying significant success in the AI landscape, quickly becoming a favorite among most iOS and Android users.
Interestingly, Apple partnered with OpenAI to integrate its technology into Siri to complement its AI efforts. However, Apple Intelligence has seemingly reported underwhelming results.
According to Apple insiders, users are seemingly struggling to adopt Apple Intelligence. And while the company claims iPhone sales are extremely high in regions where it offers the AI features, internal data shows that real-world usage is at an all-time low.
According to Bloomberg’s Mark Gurman:
“The feature feels like an afterthought and lacks conversational abilities.”
Apple showed great promise in AI, especially after unveiling its Siri digital assistant in 2011. However, it seemingly failed to keep up with the ever-evolving trends in the space, lagging behind its competitors’ offerings.
The launch of Apple Intelligence could have potentially presented the company with an opportunity to drive iPhone sales amid the depressed Chinese market. However, the company’s slow rollout and lackluster features have made the situation worse.
As you may know, Apple was criticized after its AI summaries feature was spotted generating erroneous news alerts. This forced the company to temporarily disable it while it worked on a permanent fix.
Like Microsoft and Google, Apple has a broad user base, predominantly because of its versatile ecosystem. However, it has failed to leverage this competitive advantage to catch up with its competitors.
However, Apple could redeem itself via a new software update, slated to be released in May. The update will reportedly ship with a next-gen version of Siri, which, unlike its predecessor, has a unified brain.
The current version of Siri ships with two brains. For context, the first brain handles mundane tasks like setting timers and making calls, while the other handles more advanced and complex tasks.
Initially, Apple Intelligence was supposed to ship in this format, but Apple was pressed on time to deliver the product in this form. However, Gurman claims that Apple could potentially ship its AI strategy as first intended via its iOS 19 software update.
According to Mark Gurman:
“Apple’s plan is to merge both systems together and roll out a new Siri architecture. I expect this to be introduced as early as Apple’s Worldwide Developers Conference in June of this year — with a launch by spring 2026 as part of iOS 19.4. The new system, dubbed “LLM Siri” internally, was supposed to also introduce a more conversational approach in the same release. But that is now running behind as well and won’t be unveiled in June.”
Following Apple’s miscalculations with its AI strategy, insiders have highlighted concerns, indicating “a true modernized, conversational version of Siri won’t reach consumers until iOS 20 at best in 2027.”
This means Apple is approximately five years behind its competitors in the AI landscape. While Apple’s AI strategy seems shaky at best, the software giant seems to be in more trouble.
Insiders claim the company faces critical issues, including a shortage of advanced GPUs to power its advanced AI efforts as tech giants like Microsoft and OpenAI’s demand for NVIDIA chips continues to rise.
While the company is working to solve this issue with homegrown entries via its chips team, there are indications that rival firms are scouting and poaching talent from Apple, making the situation dire.
Elsewhere, Apple recently transitioned veteran project manager Kim Vorrath into its Siri and AI division to bolster its efforts by “whipping artificial intelligence and Siri into shape.” Per the leaked memo from Apple AI lead John Giannandrea, the AI division will be focused on overhauling Siri’s infrastructure and improving the company’s in-house AI models.
