In an era when tech giants are burning hundreds of billions on massive AI data centers and infrastructure bets, Apple is conspicuously spending far less, yet quietly positioning itself to claim the real prize: ownership of consumer AI at the device level. With 2.5 billion active devices already in users’ hands, Apple’s on-device focus, powered by efficient chips and model commoditization, lets it intercept queries locally, preserve privacy, and sidestep the hyperscalers’ costly cloud dependency. Yes, Apple missed the generative AI revolution (as evidenced by the chaos in Apple’s AI management ranks over the past few years), but, far from lagging behind, this catch-up strategy — rooted in the conviction that the future belongs to whoever owns the end user — could turn Apple’s biggest apparent miss since Steve Jobs initially overlooked the digital music revolution into one of the company’s most decisive victories.
Daniel J. Arbess for The Wall Street Journal:
The four hyperscalers — Amazon, Alphabet, Meta, and Microsoft — are investing $700 billion this year in artificial-intelligence infrastructure. Apple? A mere $14 billion. A chart of these figures circulates on social media. It looks like four skyscrapers and a mailbox…
[Apple] is making a cold-eyed bet that the most frenzied build-out in the history of American capitalism will produce inadequate returns.
Last October Apple announced the M5 chip, embedding a neural accelerator in every GPU core. This wasn’t marketing theater. Apple’s own benchmarks show the M5 running a 30-billion-parameter model—capable of drafting legal briefs, debugging code, synthesizing research—in under three seconds on a standard MacBook Pro. Eighteen gigabytes of memory. No internet. No subscription. No API key…
Apple recently announced a milestone of 2.5 billion active devices. It has already distributed its existing data center — one device at a time — into the pockets and onto the desks of a quarter of the world’s connected population. When Apple licenses Google’s Gemini for roughly $1 billion a year to handle what its on-device models can’t, it is renting the penthouse while its competitors mortgage the building. If a better model shows up next year — from Anthropic, DeepSeek, the open-source community — Apple switches landlords…
New devices with “Apple Intelligence” will locally handle the tasks, email summaries, writing assistance, photo editing, translation and search, that would otherwise generate cloud inference calls. Billions of daily queries will never touch a server. Hundreds of millions of knowledge workers on iPads and MacBooks currently paying $20 a month for ChatGPT or Copilot can get equivalent capability baked into hardware they already own.
MacDailyNews Take: Once again the best model for many tasks, Grok, goes unmentioned. But, we digress.
Apple still has time to catch up, and even leap over rivals, especially when it comes to AI-powered Siri. – MacDailyNews, August 11, 2025
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As usual, Apple mostly profits from selling the hardware, not the services. Internet access, search engine, media streaming… This times, as the “competition” spend hundreds of billions and struggle to figure out how to profit from A.I. services, Apple sells the customer-facing hardware to access A.I. services. And Apple knows how to profit from selling hardware, not just playing by a different set of rules, but playing an entirely different game.
Poor Daniel. How would you like to be that sap?
His editor has told him to write something … anything … but get some eyes on it, get some clicks on it, or else. And poor sap Daniel sits on his ass in front of his computer and makes sh*t up, maybe getting AI to write most of his useless article.
A BS artist.
His words aren’t that much of a reach. Monetizing AI for the hyperscalers is a monumental task. Some of them will win, but some will die. Chat GPT’s situ isn’t lucrative…to say the least.
By many measurements, AAPL has the biggest network in the World and, until Jony and the like release a wearable, the iPh could be invaluable for millions/millions. The real question (doubt) is AAPL’s ability to go beyond with additional devices. AAPL got lucky with the mini being scooped up for “Agents” but the consumer focus is a sweet spot for AAPL. Home devices should be a natural outcome…unless invention has completely left the bldg.
Cap ex would increase, but not stratospherically and with much less risk.
Do some digging on AI before you cast the first stone. 95% of generative AI projects fail because no one wants the friction required to add real value.
But there are other reasons why the gold rush to AI may not pan out as expected such as unrealistic expectations, from the inability to govern the data effectively, the imperative to give an answer even if it’s wrong (and you may not even know it), to an inability to properly weigh the human element.
I use AI all the time to aggregate data or find information but sometimes I have found the information incorrect or even biased towards a conclusion. When you’re making critical decisions, this becomes a real liability and a business risk if you’re not smarter than the AI tool.
“When Apple licenses Google’s Gemini for roughly $1 billion a year to handle what its on-device models can’t, it is renting the penthouse while its competitors mortgage the building. If a better model shows up next year — from Anthropic, DeepSeek, the open-source community — Apple switches landlords…”
“Google’s Gemini AI platform smears seven sitting Republican Senators, among them Tom Cotton, Vice President JD Vance, and Secretary of State Marco Rubio by stating they have violated its “hate speech policies”, but found zero Democrats guilty of the same.” – “Code Red” by Wynton Hall.
More Goy-Slop from the Leftist Big Tech Oligarchies.
How’s that saying go Apple, “you can tell a lot about a person by the company they keep”!