Apple CEO Cook: AI 'Bigger Than Internet,' Ramping Up Investments
In a recent global all-hands meeting, Apple CEO Tim Cook acknowledged widespread concerns that the company has lagged behind competitors in the artificial intelligence (AI) race, pledging a concerted effort to catch up. Cook reportedly told employees that Apple "must do this. Apple will do this. This is sort of ours to grab," describing the AI revolution as "as big or bigger" than the internet itself.
The meeting followed a quarterly earnings report where Apple announced better-than-expected revenue, which sent the company's stock soaring. However, unlike some tech giants whose revenue growth was significantly driven by AI, Apple's gains were primarily attributed to strong iPhone sales. In the subsequent earnings call, Cook had already signaled Apple's intent to "significantly" increase its AI investments and explore potential acquisitions, along with "reallocating a fair number of people to focus on AI features." These sentiments were reiterated in the all-hands meeting, emphasizing the necessary investments to meet the current technological moment.
Apple has been working on integrating advanced AI into its product lineup under the "Apple Intelligence" initiative, first unveiled at the Worldwide Developers Conference in June 2024. This move came roughly a year after major competitors like OpenAI, Google, Microsoft, and Meta had already scaled up their AI offerings, leading to both anticipation and criticism.
Progress on Apple Intelligence has reportedly been slow. An AI-enhanced version of Siri was anticipated earlier this year, with advertisements for new iPhones even showcasing its capabilities. However, Apple reportedly pushed back the official unveiling at the last minute, now expected next spring, though no official confirmation has been made. This delay reportedly led to significant backlash from investors and customers, including two major lawsuits and a complete corporate overhaul.
During the meeting, Cook noted that 12,000 workers were hired in the past year, with 40% joining research and development teams. Senior Vice President of Software Engineering Craig Federighi stated that the leadership overhaul following the issues with the large language model (LLM) Siri has "supercharged" the company's AI development efforts. According to Federighi, the primary challenge with the initial LLM Siri rollout was an attempt to build a "hybrid architecture" utilizing two distinct software systems. This plan has since been abandoned. Federighi expressed confidence in the future of LLM Siri, claiming the new "end-to-end revamp of Siri" will deliver "a much bigger upgrade than we envisioned."
Central to Apple's renewed AI strategy is in-house chip development. Reports from the past year indicate Apple has been designing its own AI chips under the internal code-name ACDC (Apple Chips in Data Center). The tech giant has also reportedly partnered with Broadcom to develop its first AI chip, code-named Baltra, with mass production anticipated by 2026.
Despite its global leadership in consumer electronics, Apple is widely perceived as lagging in the AI race. While this concerns some investors and fans, others, including Tim Cook, view it as consistent with Apple's historical approach. Cook remarked in the meeting, "We’ve rarely been first." He cited examples such as the PC preceding the Mac, smartphones before the iPhone, tablets before the iPad, and MP3 players before the iPod. Cook's point underscores Apple's established pattern of entering markets later, but then perfecting existing technologies to create highly dominant products. Should Apple successfully execute its AI development and product scaling, Cook suggests AI could follow this trajectory.