After being blindsided by generative AI, late-to-the-party Apple still has “around two years” to get AI right, but to do so, they will likely need to significantly increase their AI related investments, longtime Apple analyst Gene Munster says.
Gene Munster for Deepwater Asset Management:
After years of leaning on on-device machine learning, Apple arrived late to an AI race already dominated by OpenAI, Microsoft, Google, and Meta. Two years ago, Craig Federighi’s team flagged the need for tens of thousands of GPUs, but he delayed spending amid doubts about ROI. When Apple finally moved, then-CFO Luca Maestri approved a slimmed-down budget while Apple’s competitors were ramping up investments. Additionally, Apple’s AI chief, John Giannandrea, questioned consumer demand for chatbots and took a cautious approach to scaling efforts. The company’s AI path forward would be focused on partnering.
This left Apple years behind.
Last year, the company looked to catch up with the help of OpenAI powering Apple Intelligence and a rebuilt Siri. The timing of that product roadmap proved to be too aggressive, with an almost 18-month delay of the full Apple Intelligence feature set, now expected early next year.
The bottom line is Apple seemed to underestimate the AI shift, then over-promised features, and is now racing to catch up. My belief is they have a couple of years to close the gap, and will do just that…
The reason why I believe investing more is the right approach centers on the long-term control of features. To have that control, which impacts features and privacy, the company needs to own a best-in-class model. If Apple settles for a good enough third-party AI, it risks slowing integration of AI features and paying a perpetual toll to a third party. Over the past decade, Apple has wanted to take more control, including building its own chips and modems, a prospect that 15 years ago seemed preposterous.
Some will say it’s a fool’s errand for Apple to build its own advanced models and infrastructure. They’re not only too far behind, but their track record around services is mixed. The skeptics would point to Siri struggles over the past ten years along with Maps failing to challenge Google Maps. These stumbles underscore why any Apple-built foundation model must launch at or above the standard set by OpenAI, xAI, Google, and Anthropic. In reality, the best solution for Apple is to acquire a top lab like Anthropic, whose last round was at $60B…
Apple needs to step up its capex investment to $20–$25B a year, well above the current $11B run rate and still behind the other mega caps approaching $80B annually.
MacDailyNews Take: So, according to Munster, Apple has 24 months. For perspective, the company promised “a new era of Siri, powered by Apple Intelligence” 12 months ago. It’s still MIA. So, yes, at the very least, Apple needs to invest much more in AI.
Real artists ship. – Steve Jobs
I bought a new iPhone for Siri with Apple Intelligence and all I got was this lousy glow. pic.twitter.com/I0G4Wxf5Im
— MacDailyNews (@MacDailyNews) March 25, 2025
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No, Ted Apple is too busy trying to become a gay Hollywood mogul, or pro-gay/trans activist, or figuring out how he is going appease the Chinese Communist Party, or to in general f__k around and do ANYTHING to bring products that dent the universe. His ridiculous Apple Goggles are a farce while MacOS email is incapable of effectivley stopping spam from every sicko in the universe. GET OUT OF APPLE ALREADY. Not one peep from this numbskull about great things, totally silent. O-U-T!
You have the decision to make. If you don’t like Cook or what Apple is doing, then stop whining here. Sell all your gay Apple stuff, divest, and go support some trustworthy company that does what you believe in. It could specialize in being a slumlord apartment manager, or it could bankrupt casinos, run beauty pageants in Moscow and golf courses in Scotland. It could put your country #1 with its airline and its mail-order steaks. And now you can by vaporware coins too.
Why don’t you put your money where your mouth is?
Tim Cook if you don’t understand the technology hand over to some one who does and who is also innovative surely you’ve done well enough ou of the company and they have benefitted from your management and supply chain skills. Game has changed after squandering billion on a non existent car a dearth of new products and an ability to fail to appreciate what the whole world is doing with Ai really suggest it’s time to go
And what company has offered a reliable, transparent, trustworthy AI? anyone?
Apple would be wise to avoid garbage in, garbage models.
The sooner the ai hype subsides, the better. all it has been thus far is a turbocharged plagiarism engine.
After 3 months of using ChatGPT Pro to code SwiftUI for new apps and to convert a couple of my legacy apps, I have switched to Claude Sonnet 4, the free version. It’s like night and day. My only disappointment with Claude so far is that it can’t run entire apps to root out errors. Instead, I have to point out errors in particular files and repeatedly start new chats with both the file with errors and the other files likely introducing the errors. This gets a bit problematic when the message limits are reached, which forces me to start yet another chat. I’m sure this can all be resolved over time. Given the reliance Apple and so many developers place on Swift, it would make sense for Apple to invest or acquire Anthropic. More and better apps across the Apple ecosystem, the better it is for Apple and its customers.