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Cook Confirmed That Apple Is 'Investing Significantly' in AI, And Ground-Breaking Updates Will Be Revealed Later

AInvestThursday, Feb 29, 2024 4:20 am ET
2min read

Right after the rumored halt on its car project to focus on AI, Apple held its annual shareholders meeting the very next day. Nobody knows whether it's a coincidence or not, but at the meeting, Apple's CEO, Tim Cook, said the company is indeed pouring massive resources into AI, the strongest signal to date of Apple's foray into AI.

Last year, almost every company affiliated with tech launched their AI models or applications related to AI, however, Apple seemed to be an exception: to date, the company has been remarkably quiet about its AI research, and its CEO, Tim Cook constantly expressed caution and watchful waiting about AI.

But now, Cook's tone appears to have shifted.

The CEO stated at the company's annual shareholder meeting, We have seen the incredible breakthrough potential for generative AI, which is why we're currently investing significantly in this area. We believe it will unlock transformative opportunities for our users when it comes to productivity, problem-solving, and more.

Additionally, even though Apple has yet to introduce a product to compete with models like OpenAI's GPT or Google's Gemini, Cook hinted at a significant AI update from Apple this year.

Later this year, I look forward to sharing with you the ways we will break new ground in generative AI, another technology we believe can redefine the future, Cook said.

Moreover, to emphasize the company's years of research in this technology, Cook highlighted that several Apple products have already been AI-driven, including the newly launched Vision Pro hand-tracking tool and the Apple Watch's heart rate alert feature. In addition, Cook also noted that the chips in its MacBooks can now run AI.

AI is woven into our users' lives for all sorts of tasks, from the every day to the essential, AI allows Apple Watch to help you track your workouts, automatically detecting whether you're taking a walk or going for a swim. It enables your iPhone to call for help if you're in a car accident, Cook said.

These remarks at the shareholder meeting are Cook's second endorsement of AI after saying on the company's recent earnings call that there's a huge opportunity for Apple with GenAI and AI.

Considering that both Apple and Cook have consistently used machine learning (ML) in the past to refer to the company's progress in artificial intelligence, this shift in Cook's remarks, especially yesterday's speech, indicates a significant change in his attitude toward AI.

In an interview, CFRA analyst Angelo Zino said, Apple in many respects has been late to the AI game but that is typical Apple. He added that Apple has the funds and research capability to be a major player in the AI arms race. However, Apple isn't focusing on cloud services like other companies but wants to be a leader at the device level, creating a more personalized experience for consumers while addressing privacy concerns.

Zino pointed out, Reallocating R&D towards AI initiatives illustrates the opportunity Apple see[s] ahead and where we think it has a greater chance to improve its overall ecosystem of products. Apple's high margins related to services have become a considerable driving force to increase the value of the company in the past five years.

Wedbush's analysts also believe that Apple's VR headset, Vision Pro, is Apple's first step into AI.

Bank of America analysts also predict that as AI is integrated into the iPhone, Apple will embrace a stronger iPhone upgrade cycle and higher earnings.

Apple usually announces its latest software products and features at its developer conference in June each year. This year's developer conference is seen as the moment when Apple's AI applications will take the stage collectively. When asked about which products the company will choose to launch, Cook stated, It largely depends on where the market's focus is located.

Interestingly, at this shareholders' meeting, Apple's shareholders voted against a proposal from the American Federation of Labor - Industrial Alliance (AFL-CIO). The proposal requested the company to disclose more about how it applies AI in its business and its ethical guidelines for the technology.


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