When it finally arrived, Silicon Valley’s hottest and most widespread partnership was announced so quickly that the audience at Apple’s Cupertino headquarters barely had time to applaud.
Anyone expecting OpenAI’s Sam Altman, one of the key players in the generative artificial intelligence fever sweeping the tech sector, to appear on stage with Tim Cook at Apple’s flagship annual developer event for the iconic photo opportunity was disappointed.
Apple’s Monday event was all about just that: Apple. And his message was that the partnership with OpenAI was only the first of many.
Apple’s concern for investors about falling behind in technology is that while the first wave of generative AI was about AI that understands the wider world, the iPhone maker is uniquely positioned to offer generative AI that understands you.
That said, Apple’s own generative AI models received top billing. “Apple Intelligence” is the tech giant’s catch-all term for a set of models built and trained by Apple that will be built into its new iOS 18, iPadOS18 and macOS Sequoia operating systems.
The company has not built generative models of the complexity and scale offered by competitors. Instead, it chose to act as a gateway to other products on the market that can do things Apple can’t. Its base model per device has 3 billion parameters. OpenAI’s GPT-4o and Google’s Gemini Pro are estimated to have more than a trillion.
“It doesn’t surprise me. [that Apple focused on its own solutions] because they want to emphasize that they are in control,” said Gene Munster of Deepwater Asset Management. There is, he said, a “light-year gap” between the capabilities of their model and OpenAI, and “they’re not going to play it up.”
Neither Apple nor OpenAI said whether the partnership involved either paying the other in the same way that Google pays Apple roughly $20 billion a year for the default search engine on the maker’s iPhone devices.
“We know there are other models out there, and some of them have really fantastic world knowledge,” Apple’s senior vice president of software, Craig Federighi, said after the keynote presentation. Apple, he said, is simply “starting with the best” and already has another Gemini deal planned with Google.
But even as Apple focuses on its own solutions, a cultural shift is still underway, Munster said. “Apple’s AI is at its core in someone else’s hands,” he said. “They never licensed the underlying technology to a third party.” The company’s long-standing partnership with Google in search, he said, is an on-device feature, while AI “is more of an operating system.”
Apple plays on its traditional differentiator. It says its on-device models bring privacy and security benefits, stressing that any personal data used to train its own AI models will remain in its ecosystem. These will run on the device as much as possible. Where they need to use the cloud, queries will go to servers owned and operated by Apple. The idea is that users won’t even notice what’s being used.
Features that make this possible, such as custom generated emojis, smart photo editing that allows users to seamlessly remove unwanted people or objects from photos, writing and drawing assistants, and a smarter Siri that is capable of more contextual awareness and interaction with Apple and third-party apps – party applications, are incremental. The idea is that the iPhone and its productivity features will get smarter over time as the hardware gets more powerful and Apple’s own models catch up.
Meanwhile, ChatGPT will be tasked with handling more complex questions sent to Siri. These can include, for example, sending a picture of an ingredient that OpenAI models can identify and recommend recipes for. It will also be integrated into Apple’s writing tools.
Users will not be forced to use this feature and will be prompted by Siri before doing so. OpenAI, meanwhile, promises “built-in” privacy protection every time Siri pings ChatGPT. Requests will not be stored – which would allow a third party to create a user profile – and users’ IP addresses will be hidden. Users can choose to connect their ChatGPT account, which will mean that ChatGPT’s data policy will then apply.
The move still angered Tesla CEO and X owner Elon Musk. On X, he said that Apple is clearly “not smart enough to build its own AI” and has “no idea” what OpenAI will do with the data. He said he would ban Apple devices from his companies if OpenAI were integrated into them, calling it an “unacceptable breach of security”.
If nothing else, Musk’s intervention reflected the intense scrutiny facing AI partnerships in Big Tech, with regulators vowing to step in to tackle the concentration of power.
Meanwhile, if users want Apple’s new features, they’ll have to use Apple’s latest and most powerful iPhones — the iPhone 15 Pro and Pro Max — powered by the latest A17 Pro chip. For laptops and tablets, the feature will run on devices equipped with M-series chips dating back to 2020.
If iPhone users stick with older models longer, the demand that even smaller generative models place on aging hardware motivates them to upgrade. The iPhone 16, expected later this year, now seems set for a strong marketing push highlighting its generative AI features.
Francisco Jeronimo, vice president of data and analytics at research group IDC, said the event marked “the beginning of a new era for Apple and for its users,” with Apple set to benefit from a future “supercycle” in device sales. transitions to new “smart devices”.