It’s been a long time coming, but Tim Cook is finally talking about artificial intelligence on his own terms.
The Apple CEO has repeatedly fielded questions on the breakthrough technology, but on Thursday, he announced that the iPhone-maker’s foray into generative AI would begin soon.
“As we look ahead, we will continue to invest in these and other technologies that will shape the future,” he said in a prepared speech delivered at the opening of the company’s fourth-quarter earnings call.
“That includes artificial intelligence, where we continue to spend a tremendous amount of time and effort, and we’re excited to share the details of our ongoing work in that space later this year.”
His comments came on the eve of the launch of the $3,500 Vision Pro headset as the company posted a bumper quarter that beat analysts’ expectations.
But it is the revelation that Apple will unveil its generative AI efforts this year that will undoubtedly have excited investors the most.
AI has dominated the conversation around the tech sector since the launch of ChatGPT. Its presence on earnings calls has even ballooned too, with mentions of AI increasing 10 times over in the past year, according to S&P.
In addition, Apple’s Big Tech rivals — from Google and Meta to Microsoft and Amazon — have all talked up their generative AI capabilities and how they plan to use it to drive efficiencies, productivity, and future growth.
Indeed, many are already benefiting from it.
Meta shares soared 16% in pre-market trading on Friday after it reported earnings on the same date as Apple. The rise was fuelled by Meta’s first dividend as well as its plans to ramp up AI investment in its open source AI model Llama and other areas.
“Moving forward, a major goal will be building the most popular and most advanced AI products and services,” Meta chief Mark Zuckerberg said on an earnings call this week. Last month, he revealed plans to stockpile up to 600,000 chips needed to power AI by the end of the year.
Meanwhile, OpenAI backer Microsoft reported an 18% year-on-year jump in quarterly revenue to $62 billion. CEO Satya Nadella described the period as one in which the company “moved from talking about AI to applying AI at scale.”
The Apple MO in action
What Apple’s play on AI will be is not clear just yet.
Bloomberg’s Mark Gurman reported last year that Apple’s secretive AI efforts, led by senior vice presidents John Giannandrea and Craig Federighi, are far-reaching and involve a large language model called Ajax, as well as a chatbot similar to ChatGPT.
But as has always been the case with Apple, the company doesn’t like to talk about something publicly unless it is ready to be shown off.
As Cook said on Thursday, “Our MO, if you will, has always been to do work and then talk about work and not to get out in front of ourselves.”
Whether that’s a convenient way to disguise the lack of announcements on AI from Apple compared to everyone else is a fair question. But investors will hope something really is coming.
For all the hype around the Vision Pro, the technology is expensive and has yet to get approval from a mass market audience.
A slowdown in China is also a growing concern, with iPhone sales being pressured by the rise of more advanced smartphones from domestic players like Huawei.
Sales in the greater China region were down from $24 billion in the final quarter of 2022 to $20.8 billion in 2023, taking some of the shine of Apple’s fourth quarter and contributing to its share price’s 3% slump in after-hours trading.
That said, the mere mention of AI from the company is a sign that the company has a big plan coming for the technology.
Or as Cook put it in response to a question on AI from Goldman Sachs’s Mike Ng: “We’ve got some things that we are incredibly excited about that we’ll be talking about later this year.”
