Stephen Lam/Reuters
- Apple has been quiet about its AI strategy while rivals like Microsoft and Google battle it out.
- Analysts say it could be left in the dust if it doesn't ensure AI will be a larger part of its future.
- Apple CEO Tim Cook needs to balance AI development with its ongoing supply chain issues.
It's a new AI arms race, and Big Tech companies are scrambling to meet the moment.
Microsoft and Google released competing AI-powered products last week, amid a slew of other companies began announcing plans for products and services running on some type of AI. This new race —driven by the hype surrounding OpenAI's viral ChatGPT application— has turned AI into the new battleground.
Notable by its absence in the current conversation, however, is Apple. While all of its peers, including Amazon, seem to be rushing to get into the so-called generative AI craze, Apple hasn't said anything one way or the other about the space.
Apple is known to work with AI — the iPhone's cameras, the Apple Watch's SOS feature, and the Siri virtual assistant are all powered by the technology to some degree. Apple CEO Tim Cook himself has said that AI "will affect every product and service we have."
But as ChatGPT pushes expectations for what's possible from AI, industry analysts say that Apple is running out of time to show that it can keep pace with its competitors. At stake, they say, is Apple's ability to remain competitive in a fast-changing market.
"It's not a choice for Apple as AI is an arms race for Big Tech with $1 trillion of spending slated for the next decade," Wedbush analyst Dan Ives told Insider. "Microsoft and Google's announcements will speed up the clock on Apple and around its AI strategy, and time is ticking."
Apple's advantage is rarely in moving first
Wedbush's Ives pointed out Apple has spent around $10 billion on research and development around AI and expects some major AI-related announcements this summer when the company announces new products.
Apple, though, has rarely been known as a first mover for AI and has tended to wait until consumers begin to demand certain technologies.
Apple has worked with AI for several years now, but DA Davidson analyst Tom Forte predicts that it's not the company's style to launch a big, splashy AI product of its own. Instead, he says, it's more likely to be used in the background.
"As one of the biggest companies in the world, Apple is doing something around AI, but it will not be as buzzy as ChatGPT. When Apple uses AI, they do so more to enhance their technology," said Forte.
At the same time, Apple has plenty of room for improvement in AI, the experts said. Siri, Apple's pioneering voice assistant, is generally considered far behind Amazon's Alexa or Google's Assistant. The AI-powered SOS feature, which lets an Apple Watch call emergency services if it detects an accident or heart failure, is said to be prone to false alarms.
Delivering an interesting AI product is not the only problem Apple needs to address.
Apple faced supply chain issues in 2021, delaying the delivery of the iPhone 14 Pro after protests around Covid-19 shutdowns temporarily closed its Chinese manufacturing hubs. The company has talked about diversifying its supply chain process, which could take decades.
But ultimately, Apple will have to split its focus. It needs to make sure people know it's working to integrate more AI into its products soon, but it also has to make sure it solves its supply chain issues and has at least one year with no delivery delays. In other words, Apple has a lot on its plate right now.
One thing Apple has going for it is that people are sold on its design and ecosystem. But that might not be enough to convince some investors. It needs to show that it is thinking about AI without actually having to reinvent the wheel.
"As an investor, I'd rather have confidence that it's using AI in many different uses to enhance its existing technology because AI is not the reason consumers buy Apple products," Forte said.