Apple Reportedly Building ChatGPT-Like AI, Faces Talent & M&A Pressure
Apple is reportedly developing a new artificial intelligence product, an "Answer Engine," to compete with advanced AI search solutions like ChatGPT. This initiative marks Apple's intensified effort to catch up in the rapidly evolving AI landscape, a sector where it has faced criticism for lagging behind rivals.
According to a Bloomberg report by Mark Gurman on Monday, August 4, Apple has established a new team, reportedly named Answers, Knowledge, and Information, to lead the development of this AI chatbot. The "Answer Engine" is designed to respond to user queries by drawing information from across the web. It could potentially be launched as a standalone application or integrated to enhance search functionalities within existing Apple products such as Siri and Safari. Apple is actively recruiting for this team, seeking specialists in search algorithms and engine development.
Despite being a pioneer in technology with products like the iPhone and Mac, Apple has been perceived as missing out on the initial AI boom. While the company did introduce Apple Intelligence, it has acknowledged several shortcomings and delays, including the promised integration of ChatGPT into Siri and more personalized AI updates for its voice assistant. Current AI features, such as text message summaries, have been described as basic and not particularly useful.
In its pursuit to narrow the AI gap, Apple has also experienced significant talent drain. At least four prominent AI researchers have departed for Meta's "Superintelligence" team, including Ruoming Pang, Apple's former head of AI division, who was reportedly lured by a compensation package exceeding $200 million.
Apple CEO Tim Cook has indicated the company's openness to "M&A that accelerates [Apple’s] roadmap" during recent investor calls. This comes amid pressure from investors urging Apple to explore external partnerships or acquisitions to bolster its AI talent in Cupertino. Some investors have even suggested Apple acquire Perplexity, a rapidly growing AI search startup founded by Indian-origin computer scientist Arvind Srinivas, as a way to revamp Siri.
Despite the slow progress in AI, Apple remains a dominant force in Silicon Valley. The company recently announced its strongest quarterly revenue growth since 2021, reporting $94 billion in revenue, surpassing analyst expectations. This performance was primarily driven by robust iPhone sales and surging services revenue. However, market reaction to these results was mixed, with analysts expressing ongoing concerns about long-term issues, including tariffs and Apple's AI strategy.