The Big Reveal
Just two days ago, Apple unveiled “Apple Intelligence,” a groundbreaking personal intelligence system that integrates generative models into their core products. This innovative system focuses on three main pillars: On-Device LLM, Private Cloud LLM, and a ChatBot.
AI Strategy
On-Device LLM Apple’s On-Device LLM (Large Language Model) sets a new benchmark for privacy in AI. By harnessing the power of their advanced microchips, Apple ensures that your data stays on your iPhone instead of being sent to third-party servers. This approach not only enhances security and privacy but also reinforces Apple’s promise: “Privacy. That’s iPhone.”
Private Cloud LLM Apple is also ramping up the use of its chips in private data centers. This strategy allows Apple’s AI tools to transfer user data to a private cloud, ensuring robust security while leveraging a vast pool of data to enhance functionality.
ChatBot The final piece of Apple Intelligence is the ChatBot, developed in collaboration with OpenAI. This partnership brings a cutting-edge chatbot to Apple users, with OpenAI managing data liability. The ChatBot promises to be a highly sought-after feature, seamlessly integrated into the iPhone experience.
The OpenAI Partnership
Siri can now access ChatGPT’s expertise when necessary, thanks to this integration. Strict data usage guidelines ensure that users are informed and provide consent before any questions, documents, or photos are shared with ChatGPT. Privacy measures are rigorous, with IP addresses being obscured and OpenAI not storing requests. Users who connect their accounts will adhere to ChatGPT’s data-use policies.
The collaboration between Apple and OpenAI is particularly intriguing. OpenAI opted for an exclusive launch with Apple, recognizing that a significant portion of its user base are Mac users. This synergy suggests a perfect partnership, benefiting both companies and their users.
User Impact
Apple Intelligence introduces advanced writing tools across all apps, enabling effortless proofreading, rewriting, and text summarization. Users can also receive direct support for various tasks, like switching from Light to Dark mode on their devices. Additionally, Apple’s AI will progressively understand and act on user content across more apps. For instance, you can ask Siri to “Play that podcast that Jamie recommended,” and Siri will find and play the episode, regardless of whether the recommendation came via text or email. This raises important questions about data ownership: will it be the app provider or Apple?
Market Reaction
Surprisingly, Apple’s stock dipped on the day of the AI announcement. This drop likely stemmed from inflated expectations among Wall Street traders, who may have anticipated revolutionary new AI technology rather than enhancements similar to existing systems.
However, the stock rebounded the following day, closing at an all-time high. This surge could be attributed to a deeper analysis of the financial potential behind Apple’s announcements. With over 2 billion active devices globally, many of which are older models, Apple’s AI platform may trigger an upgrade “supercycle” this fall with the launch of the iPhone 16 lineup. Currently, only the iPhone 15 Pro and iPhone 15 Pro Max will support Apple Intelligence when iOS 18 is released, potentially driving users to upgrade.
