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Elon Musk’s xAI could be the ally Apple needs – analyst

MacDailyNews

Jul 21

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Apple might benefit from an external AI partnership, and Elon Musk’s xAI could be the ideal match, says Melius’s Ben Reitzes.

Adam Clark for Barron’s:
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Apple’s struggles with artificial intelligence are becoming critical. It needs to do something big to be a real player in that area, and a partnership with Elon Musk’s xAI could be the ticket required, according to Melius Research.
The company recently lost one of its top AI researchers — Ruoming Pang, who led its machine-learning foundation model team — to Meta Platforms, according to The Wall Street Journal.
That means the focus is on Apple’s potential to strike a deal with an external AI partner. Melius’s Ben Reitzes says Elon Musk’s xAI could be the ally it needs.
“Apple could provide xAI with the users it needs to top [ChatGPT developer] OpenAI in return for giving Apple all the benefits of owning an LLM [large language model] without the capex,” wrote Reitzes in a research note on Monday… “Tim Cook and his team are likely to be rewarded for thinking bolder to accelerate Apple’s AI push, even if they have to step out of their comfort zone.”

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MacDailyNews Take: If you’re going to with an external AI partner, why not choose the smartest one? We find xAI’s Grok to be more accurate and useful than Google’s Gemini, ChatGPT, and the rest. In his note, Reitzes reiterated his “Buy” rating and $240 target price on Apple stock.

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