Apple's Strategic Move into AI and Its Implications

Apple is enhancing its artificial intelligence (AI) capabilities with a strategic approach, including acquiring 21 AI startups since early 2017. This move is part of its broader initiative to integrate AI more deeply into its future iPhones.

The company is focusing on the challenge of operating AI on mobile devices, as evidenced by industry reports, academic research, and tech sector insights. This initiative sets Apple apart from its major competitors in the Big Tech sphere.

Apple's recent acquisition of WaveOne, a California-based startup specializing in AI-driven video compression, underscores its commitment to AI development. Daniel Ives from Wedbush Securities anticipates significant mergers and acquisitions in Apple's future, highlighting the ongoing AI arms race in the tech industry.

A substantial portion of Apple's AI job listings now emphasize "Deep Learning," which is integral to generative AI models capable of producing human-like text, audio, and code. The recruitment of John Giannandrea, a former top AI executive at Google, in 2018 further reinforces Apple's focus on AI.

Despite its rivals like Microsoft, Google, and Amazon openly investing in AI, Apple maintains a veil of secrecy around its AI strategies. However, industry insiders suggest that Apple is developing its own large language models, similar to the technology behind generative AI products like OpenAI's ChatGPT.

CEO Tim Cook has spoken about Apple's broad research in AI and responsible innovation in this field. The company aims to enable generative AI on mobile devices, allowing AI applications and chatbots to operate on the device itself rather than relying on cloud-based data centers. This objective involves shrinking the size of AI models and enhancing processor performance.

While other manufacturers like Samsung and Google have already released devices with generative AI features, Apple is expected to reveal its advancements in this area at the upcoming Worldwide Developers Conference, with iOS 18 likely to support generative AI capabilities.

Apple has also introduced new chips designed for more efficient AI processing, such as the M3 Max for MacBooks, the S9 for the Apple Watch, and the A17 Pro for the iPhone 15. These chips boast improved neural engines and capabilities for running generative AI.

A recent Apple research paper highlighted a breakthrough in running large language models on devices using Flash memory, allowing faster and offline query processing. Additionally, Apple's collaboration with Columbia University on the open-source LLM "Ferret" demonstrates its commitment to connecting AI with the real world.

Despite Microsoft surpassing Apple as the world's most valuable listed company, partly due to its AI initiatives, analysts at Bank of America have upgraded Apple's stock rating, citing the potential demand for new AI features in iPhones.

Apple's AI strategy is focused on enhancing its ecosystem and maintaining its customer base, differentiating itself from the AI ambitions of Google and Amazon, which aim to be the foundational platforms for AI app development in businesses.