Clicky chatsimple

Three Things Apple’s Results Revealed About Its AI Initiatives

Category :


Posted On :

Share This :

At Thursday’s Q2 results call with investors, Apple CEO Tim Cook confirmed a few details regarding the company’s future plans for artificial intelligence, but he didn’t reveal much about them.

Notably, his remarks implied that Apple isn’t intending to spin up too many additional data centers to run or train AI models, even though the company has spent more than $100 billion on R&D over the last five years. Rather, the business informed investors that it will stick to its “hybrid” approach to AI, just as it does with other cloud services.

AI will be used on gadgets other than iPhones. It was also revealed that Apple sees artificial intelligence (AI) as a huge prospect for the “vast majority” of its product lineup, not just the iPhone. Although this has long been known—Apple has been referring to its M3 MacBook Airs as the “best consumer laptop for AI”—the firm made clear on its earnings call just how AI is being used to all of its devices.

“I think AI, both generative and otherwise, presents significant opportunity for us throughout our product line. We’ll be discussing this topic further in the upcoming weeks. We believe we’re in a good position, and I think there are a lot of ways there that are fantastic for us,” Cook said.

Cook also mentioned that the Apple Watch, in addition to the MacBook Air, incorporates AI and machine learning in capabilities like fall detection and notifications of irregular heartbeat. The CEO also mentioned large businesses purchasing Vision Pro and looking into its use cases when discussing the enterprise, but he cautioned against “cabinting that to AI only.”

“Let me just state that we consider generative AI to be a major opportunity for all of our products. And we think we have advantages over others there,” Cook stated.

AI is unlikely to be discussed during this month’s iPad launch. Customers who have been waiting impatiently for an AI-powered Siri will have to wait a little longer, though, as it has long been anticipated that the announcement will be revealed at Apple’s Worldwide Developers Conference (WWDC) in June. Cook said he was “extremely optimistic” about the technology, but said he wouldn’t see any influence “within the next quarter or so” regarding generative AI in response to a question on Thursday regarding how AI may affect customer desire for new gadgets like the iPhone.

Bigger AI announcements from Apple won’t be made prior to WWDC. This information was uncovered via a correction to a CNBC news article that misconstrued a statement made by Cook, which seemed to suggest that there would be “big plans to announce” from a “AI point of view” at both future events—the iPad event next week and WWDC in June. However, as later edits reveal (perhaps following a scolding from an agitated Apple communications staff), Cook had actually paused before saying, “from an AI point of view,” which was the beginning of his next thought and unrelated to Apple’s schedule for both events.

This modification was made to the story so that readers would not assume that AI news would be revealed during the May 7 iPad event. (Here on 9to5Mac, you can see the history of the revisions.)

Although we didn’t anticipate hearing much, if anything, on AI until WWDC, this correction essentially validates that timeliness.

Apple is investing in AI in a hybrid way. The most significant AI news, though, comes from Cook’s remarks regarding Apple’s capital expenditures (CapEx)—money used to pay for fixed assets like servers, data centers, real estate, and more.

Even while that’s not usually the most fascinating topic, the company’s statement this time alluded to Apple’s intentions to invest in AI. Apple CFO Luca Maestri responded to a question regarding generative AI’s effect on Apple’s historical CapEx cadence by stating that Apple follows a hybrid model, “where we make some of the investments ourselves, in other cases we share them with our suppliers and partners,” as technology investor M.G. Siegler noted on his blog.

Moreover, Apple “does something similar on the data center side,” he continued. In addition to using capacity from outside sources, we also have our own data center.

We intend to stick on the same course moving forward because it’s a model that has historically worked well for us, Maestri added.

According to Siegler, this indicates that Apple will not require capital expenditures (CapEx) as it does not have urgent plans to develop and train large language models (LLMs) on its own servers.

Additionally, if you squint just a bit, it might be another indication that Apple is considering hiring outside companies to power its AI services. Apple has been in talks with Google and ChatGPT maker OpenAI to power an AI chatbot that will be included in the iOS 18 upgrade, as Bloomberg reported in April.

Given Apple’s confirmation that its near-term AI aspirations won’t impact its capital expenditure, it seems probable that the company is preparing to enter into some kind of agreement with partners for AI services beyond what it can provide on-device and independently. It remains to be seen if Apple finally tips the scales in favor of using more of its own servers and data centers.