Apple CEO Tim Cook didn’t give much away in regards to the company’s AI plans on Thursday’s Q2 earnings call with investors, but he did confirm a number of tidbits about how the tech giant plans to maneuver forward with artificial intelligence.
Notably, his comments suggested that despite spending greater than $100 billion on R&D during the last five years, Apple isn’t planning to spin up too many latest data centers to run or train AI models. As a substitute, relating to AI, it’s going to proceed to pursue a “hybrid” approach, because it does with other cloud services, the corporate told investors.
AI will span devices beyond the iPhone
We also learned that Apple envisions AI as a key opportunity across the “overwhelming majority” of the corporate’s device lineup, not only the iPhone. While we’ve known this for a while — in spite of everything, Apple has been calling its M3 MacBook Airs the “best consumer laptop for AI” — the corporate shouted out on its earnings call how AI is getting used across its products.
“I feel AI — generative AI and AI — each are big opportunities for us across our products, and we’ll talk more about it in the approaching weeks. I feel there are many ways there which might be great for us, and we predict that we’re well-positioned,” Cook said.
Along with the MacBook Air, the Apple Watch uses AI and machine learning in features like its irregular heart rhythm notifications and fall detection, Cook noted. And when speaking in regards to the enterprise, the CEO referenced big firms buying and exploring the use cases for Vision Pro, though he added that he wouldn’t need to “cabin that to AI only.”
“I might just say that we see generative AI as a really key opportunity across our products. And we consider that we now have benefits that set us apart there,” Cook said.
AI won’t likely come up on the iPad event this month
Nonetheless, customers itching to have an AI-powered Siri may have to attend a bit longer for that news, which has long been expected to be announced at Apple’s Worldwide Developers Conference (WWDC) in June. When Cook was asked Thursday about how AI will affect consumer demand for brand spanking new devices like iPhone, he responded that, with regard to generative AI, we wouldn’t see any impact “inside the subsequent quarter or so,” but said he was “extremely optimistic” in regards to the technology.
Apple isn’t planning to make its larger AI announcements before WWDC.
This discovery got here about through a correction to a CNBC news story, which had misinterpreted a press release Cook made to seemingly indicate there can be “big plans to announce” from an “AI viewpoint” at each upcoming events, including next week’s iPad event and WWDC in June. But as subsequent corrections show (likely after a lashing by a frantic Apple comms team), Cook had paused before saying “… from an AI viewpoint …” which was the beginning of his next thought and never connected to Apple’s plans for each events.
The story was updated with this correction so people didn’t think AI news can be announced on the iPad event scheduled for May 7. (You possibly can read through the backstory on the corrections here on 9to5Mac.)
While we didn’t expect to listen to much if anything about AI until not less than WWDC, this correction mainly confirms that timing.
Apple is taking a hybrid approach to AI investments
The largest AI news, nonetheless, is something Cook said about Apple’s CapEx expenditures, that are funds spent on fixed assets, like servers and data centers, real estate and more.
While that’s infrequently probably the most interesting subject, this time the corporate’s response hinted toward Apple’s AI investment plans. As technology investor M.G. Siegler identified on his blog, Apple CFO Luca Maestri had answered a matter about generative AI’s impact on Apple’s historical CapEx cadence by explaining that Apple pursues a hybrid model, “where we make a few of the investments ourselves, in other cases we share them with our suppliers and partners …”
Plus, he added, Apple does “something similar on the info center side. We’ve our own data center capability after which we use capability from third parties.”
“It’s a model that has worked well for us historically, and we plan to proceed along the identical lines going forward,” Maestri said.
Siegler interpreted this to mean that Apple won’t have to spend on CapEx because Apple isn’t planning to instantly construct and train LLMs (large language models) by itself servers.
And, in the event you squint slightly, it may be one other signal that Apple might be third parties to power its AI services. As Bloomberg reported in April, Apple has been holding discussions with ChatGPT maker OpenAI and Google to power an AI chatbot coming in an iOS 18 update.
With Apple confirming that its CapEx wouldn’t be affected by its near-term AI plans, it’s likely that Apple is planning to forge some form of take care of partners for AI services along with what it may handle on-device and by itself. Whether Apple eventually shifts the balance to utilize more of its own servers and data centers over time still stays to be seen.
