Apple is increasing its efforts in artificial intelligence, through various products, recruitment of staff, and upgraded hardware, all aimed at integrating AI into the next generation of iPhones. The company, based in California, has been focused on solving the technical challenges of implementing AI on mobile devices. In fact, Apple has outpaced its major tech rivals in acquiring AI startups, with a total of 21 acquisitions since the beginning of 2017, as shown in a PitchBook survey. The most recent acquisition was the purchase of California-based WaveOne in early 2023, a company specializing in AI video compression. According to Daniel Ives at Wedbush Securities, “They are planning to do significant M&A. I would be surprised if they don’t play a big role in AI this year, because there’s an AI hardware race going on, and Apple won’t be on the outside looking in.” As reported by Morgan Stanley, nearly half of Apple’s AI operations now incorporate the term “Deep Learning”, which is linked to AI-powered algorithms capable of generating text, audio, and code within seconds. In 2018, the company recruited John Giannandrea, who was previously the head of AI at Google. Despite the heavy investment in advanced technology by major tech rivals such as Microsoft, Google, and Amazon, Apple has kept its AI plans relatively secretive. However, industry insiders suggest that the company is utilizing its core language models—the technology that powers artificial intelligence products, such as OpenAI’s ChatGPT. According to CEO Tim Cook, Apple has been researching a wide range of AI technologies and is making intelligent investments in new technologies. Apple aims to enable AI output through mobile devices, allowing AI chatbots and software to function on the mobile phone and its apps, rather than being managed by cloud services in data centers. To tackle this technical challenge, Apple needs to reduce the size of the large languages that power AI and utilize high-end processors. While other device makers, such as Samsung and Google, have made advancements in using AI tools through their phones, it is expected that Apple will unveil its latest operating system, iOS 18, at its Worldwide Developers Conference in June. Analysts from Morgan Stanley anticipate that the mobile application development may include the voice assistant Siri, supported by an LLM. Igor Jablokov, head of AI at Pryon, commented that Apple tends to wait until the technology is fully developed before giving a preview. In addition to its software efforts, Apple has also introduced new chips with enhanced capabilities to support artificial intelligence. For instance, the M3 Max processor for the MacBook, unveiled in October, is described by the company as opening up new possibilities for laptops, especially for AI developers working with massive amounts of data. The S9 chip in the new Apple Watch models, launched in September, enables Siri to access and input data without an internet connection, while the A17 Pro chip in the iPhone 15, also announced at the same time, boasts a neural engine that Apple claims is twice as fast as previous generations. Apple researchers have also publicized their success in running LLMs on devices utilizing Flash memory, allowing for quick updates even without internet access. They have demonstrated a prototype called “Ferret” as a research tool, enabling the system to recognize objects in a picture and provide information about them using language. Nonetheless, the current cost of using such technology for practical applications can be significant. Laura Martin, a senior analyst at Needham, stated that Apple’s AI strategy aims to benefit its ecosystem and protect its bottom line. He added: “Apple doesn’t want to do what Google and Amazon aim to do, which should be the backbone of all American businesses.”
