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
Please help support MacDailyNews — and enjoy subscriber-only articles, comments, chat, and more — by subscribing to our Substack: macdailynews.substack.com. Thank you!
Support MacDailyNews at no extra cost to you by using this link to shop at Amazon.
The post Gene Munster: Apple has ‘a couple years’ to catch up in AI, needs to invest much more, perhaps acquire Anthropic appeared first on MacDailyNews.
No comments:
Post a Comment