Apple CEO Tim Cook didn’t say much about the company’s artificial intelligence plans on Thursday’s earnings call with investors, but he did confirm a few details about how the tech giant plans to move forward with artificial intelligence.
Notably, his comments suggest that despite spending more than $100 billion on R&D over the past five years, Apple doesn’t plan to build too many new data centers to run or train AI models. Instead, when it comes to artificial intelligence, it will continue to take a “hybrid” approach, as it does with other cloud services, the company told investors.
AI will extend to devices beyond the iPhone
We’ve also learned that Apple envisions AI as a key opportunity in the “vast majority” of the company’s device lineup, not just the iPhone. While we’ve known this for some time — after all, Apple calls its M3 MacBook Airs the “best consumer laptop for artificial intelligence” — the company touted at its earnings call how AI is being used in its products.
“I think AI — genetic AI and artificial intelligence — are both big opportunities for us across all of our products, and we’ll be talking more about that in the coming weeks. I think there’s a lot of ways there that are great for us and we think we’re in a good position,” Cook said.
In addition to the MacBook Air, the Apple Watch uses AI and machine learning in features such as irregular heart rate alerts and fall detection, Cook noted. And when talking about the business, the CEO referred to major companies buying and exploring the use cases for Vision Pro, though he added that he wouldn’t want to just “embed it into AI.”
“I would just say that we see genetic AI as a very core opportunity for our products. And we think we have advantages that set us apart there,” Cook said.
Artificial intelligence likely won’t appear at this month’s iPad event
However, customers who want to own an AI-powered Siri will have to wait a little longer for this news, which has long been expected to be announced at Apple’s Worldwide Developers Conference (WWDC) in June. When asked Thursday about how artificial intelligence will affect consumer demand for new devices like the iPhone, Cook said that, in terms of genetic artificial intelligence, we won’t see any impact “within the next quarter or so,” but said he was “extremely optimistic” about the technology.
Apple doesn’t plan to make its biggest AI announcements before WWDC.
This discovery came about through a correction to a CNBC news story, which had misinterpreted a statement made by Cook to seemingly indicate that there would be “big plans to announce” from an “AI perspective” at both upcoming events, including next week’s iPad event and WWDC in June. But as subsequent corrections show (probably after a whip from a frantic Apple communications team), Cook had stopped short of saying “…in terms of artificial intelligence…” which was the beginning of his next thought and unrelated to her plans Apple for both events.
The story was updated with this correction so people didn’t think AI news would be announced at the iPad event scheduled for May 7. (You can read the background about fixes here at 9to5Mac.)
While we didn’t expect to hear much about AI until at least WWDC, this fix basically confirms that timeline.
Apple is taking a hybrid approach to AI investments
The biggest AI news, however, is something Cook said about Apple’s CapEx spending, which is capital spent on fixed assets like servers and data centers, real estate and more.
While this isn’t often the most interesting topic, this time the company’s response hints at Apple’s AI investment plans. As technology investor MG Siegler he pointed out on his blogApple CFO Luca Maestri had responded to a question about the impact of genetic artificial intelligence on Apple’s historical CapEx rate, explaining that Apple follows a hybrid model, “where we do some of the investments ourselves, in other cases we share them with our suppliers and partners…”
Additionally, he added, Apple is doing “something similar on the data center side. We have our own data center capacity and then use capacity from third parties.”
“It’s a model that has worked well for us historically and we plan to continue along those lines going forward,” Maestri said.
Siegler interpreted this to mean that Apple won’t need to spend on CapEx because Apple doesn’t plan to immediately build and train LLMs (large language models) on its own servers.
And, if you squint a bit, it could also be another signal that Apple could be looking to third parties to power its AI services. As Bloomberg reported in April, Apple is having discussions with ChatGPT maker OpenAI and Google to power an AI chatbot coming in an iOS 18 update.
With Apple confirming that its CapEx will not be affected by its near-term AI plans, it’s possible that Apple plans to enter into some sort of deal with partners for AI services beyond what it can handle on-device and on its own her. Whether Apple will eventually shift the balance to use more of its own servers and data centers over time remains to be seen.
