Bloomberg is reporting that tech giant Apple (AAPL) will announce that it will discontinue production of its long-awaited electric car project, known as Project Titan, according to sources familiar with the matter. The company will move its resources into the Generative AI space as tech giants compete in the nascent technology.
Shars of AAPL reacted positively to the news, rallying from $180 to $184. The stock pulled the rest of the market higher.
AAPL shares were dragging lower as four straight quarters of revenue decline in 2023 weighed on sentiment. The stock has been stuck below its 200-day moving average since February 14. News of it streaming lining its business and focusing on the hot Generative AI space could break the negative sentiment fever surrounding the name.
The decision has surprised nearly 2,000 employees working on the project, who were informed by Apple's Chief Operating Officer Jeff Williams and Vice President Kevin Lynch. The project, which had aimed to create a fully autonomous electric vehicle with advanced features, has faced numerous challenges and setbacks over the past decade.
Apple will now shift many employees from the car project to its artificial intelligence (AI) division, under the leadership of executive John Giannandrea. These employees will focus on generative AI projects, a growing priority for the company.
The car team also has hundreds of hardware engineers and car designers, and some of them may be able to apply for jobs on other Apple teams. However, there will be layoffs, and the exact number of employees affected is not yet clear.
Apple's electric car project has been rumored for years, with recent reports suggesting that the company had driven over 45,000 miles in 2023 using the autonomous driving technology it has developed.
Last month, Bloomberg reported that Apple had pushed back the car's expected launch to 2028. The cancellation of the project comes as a surprise, as just last month, reports suggested that the car, which was rumored to remain under the $100,000 threshold, wouldn't come with the advanced self-driving capabilities the company initially hoped for.
The project has faced numerous challenges, including high turnover among staff, constantly changing plans, and internal skepticism. Apple's decision to abandon the electric car project and shift focus to generative AI projects highlights the company's commitment to staying at the forefront of technological innovation.
The move may also indicate that the company is reassessing its priorities in light of the evolving competitive landscape and the rapidly changing nature of the automotive industry.
In conclusion, Apple's cancellation of the electric car project signifies a significant shift in the company's strategic direction. The move to focus on generative AI projects reflects Apple's ongoing pursuit of cutting-edge technology and its desire to remain competitive in an ever-evolving market.