What you need to know
- A new report claims Apple's long-anticipated AI strategy could be two years behind its competitors, such as OpenAI's ChatGPT.
- However, Apple's broad user base and resources could give Apple Intelligence the edge to compete with ChatGPT and Copilot on an even playing field.
- Bloomberg's Mark Gurman claims Apple Intelligence will be deeply integrated across Apple's ecosystem by 2026.
I've often referred to Apple as a "late-bloomer in the AI landscape" in contrast to its competitors like Microsoft, Google, and OpenAI who have a significant leap in the category owing to their early investment and integration of cutting-edge technology across their tech stack.
Apple only joined the AI fray earlier this year during WWDC 2024, after announcing its new AI strategy — Apple Intelligence. At the time, Microsoft and NVIDIA were flying high, trading places as the world's most valuable company crown due to their AI efforts with over $3 trillion in market valuation.
While Apple joined the fray, briefly reclaiming its reign as the world's most valuable company shortly after announcing its new AI strategy, a new report by Bloomberg's Mark Gurman suggests the iPhone maker's Apple Intelligence offering could be two years behind OpenAI's ChatGPT even before it ships.
According to Gurman:
"Some at Apple believe that its generative AI technology – at least, so far – is more than two years behind the industry leaders."
"OpenAI’s ChatGPT was 25% more accurate than Apple’s Siri, and able to answer 30% more questions,” Gurman added. Based on this premise, ChatGPT's performance is significantly better than Apple's yet-to-ship Apple Intelligence. However, Gurman suggests this might not be the case for long, as Apple's delayed launch of the offering could indicate that the iPhone maker is trying to catch up with its rivals.
Apple could be setting itself up for success in AI
While two years might seem considerably long, especially in the ever-evolving AI landscape, Gurman says "It’s hard to count Apple out." Over the years, Apple has subtly built a reputation for taking time before jumping face-first into new ventures but becoming the best at everything it dabbles its hand in.
With the rising privacy and security concerns around AI, this might be a smart play on Apple's end. Apple could be trying to cover its basis on the security and privacy front before hopping into the AI fray. A separate report suggests that 30% of AI projects will be abandoned after proof of concept. And while this might be a stretch, it could also be a huge gamble given AI's vast demand for computing power and funding.
For instance, OpenAI was recently on the verge of bankruptcy, with projections of $5 billion in losses within the next 12 months. However, investors, including Microsoft, NVIDIA, Thrive Capital, and more raised $6.6 billion to emancipate the ChatGPT maker from bankruptcy, pushing its market cap to $157 billion. Apple was also in the fold but wiggled out of the exercise at the eleventh hour for unspecified reasons.
Mark Gurman claims, "At some point, Apple will either develop, hire, or acquire its way into the top tier of AI companies." Apple's huge user base plays in the company's favor, giving it a competitive edge over its rivals in the space.
Microsoft has seemingly struggled to use the same play in its Windows operating system. In a poll featured in Windows Central, more than half of the polled readers indicated that they never use Copilot. The tech giant recently overhauled Copilot with a warm and more intuitive user experience — which has been received with reservations, with some indicating that they'd switch to OpenAI's ChatGPT offering if Microsoft doesn't revert the change.
ChatGPT reigns over Copilot on mobile and additions like OpenAI's magical GPT-4o model leading to the biggest spike in downloads and revenue. According to a report, the top complaint about Copilot based on user feedback is that it doesn't work as well as ChatGPT. Microsoft indicated this isn't the case and that users weren't leveraging its capabilities as intended while pointing to a lack of proper prompt engineering practices, consequently launching Copilot Academy to address the issue.
It's nearly impossible to determine Apple's success or failure in AI, but the odds are seemingly stacked in its favor. “By 2026, nearly every Apple device with a screen will run it: The iPhone SE will gain the features in March, and the entry-level iPad will probably get updated later in the year,” concluded Gurman. Apple is expected to ship Apple Intelligence to broad availability on October 28, 2024.
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