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Three things we learned about Apple’s AI plans from the earnings

Apple CEO Tim Cook hasn’t revealed much about the company’s AI plans Second quarter earnings conference call with investors on Thursdaybut he confirmed a few details about how the tech giant plans to further develop artificial intelligence.

In particular, his comments suggested that despite spending more than $100 billion on research and development over the past five years, Apple does not plan to open too many new data centers to run or train AI models. Instead, as with other cloud services, it will continue to pursue a “hybrid” approach to AI, the company told investors.

AI will extend to devices beyond the iPhone

We also learned that Apple sees AI as a key opportunity for the “vast majority” of the company’s device lineup, not just the iPhone. We’ve known this for some time – after all, Apple has already announced it M3 MacBook Airs the “best consumer laptop for AI” – the company emphasized in its conference call how AI is used in its products.

“I think AI – generative AI and AI – represent big opportunities for us across all of our products, and we’ll be talking more about that in the coming weeks. I think there are numerous opportunities that are great for us and we think we are well positioned,” Cook said.

In addition to the MacBook Air, the Apple Watch leverages AI and machine learning in features such as irregular heart rhythm notification and fall detection, Cook noted. And when talking about the company, the CEO pointed to large companies buying Vision Pro and exploring use cases for Vision Pro, but added that he didn’t want to “limit this to just AI.”

“I would just say that we see generative AI as a very important opportunity for all of our products. And we believe we have advantages there that set us apart,” Cook said.

AI probably won’t come up at this month’s iPad event

However, customers who want AI-powered Siri will have to wait a little longer for this news, and that has been the case for a long time is expected to be announced at Apple’s Worldwide Developers Conference (WWDC) in June. When asked Thursday how AI will impact consumer demand for new devices like the iPhone, Cook responded that we wouldn’t see an impact on generative AI “within the next quarter or so,” but said he was “extreme”. “optimistic” about the technology.

Apple doesn’t plan to make its major AI announcements before WWDC.

This discovery came about through a correction of a CNBC news story, which misinterpreted a statement from Cook that appeared to suggest that there would be “big plans to announce” from an “AI perspective” at both upcoming events, including next week’s iPad event and WWDC in June. But as later corrections show (likely after a flogging by a frantic Apple communications team), Cook had paused before saying, “…from an AI perspective…”, which was the start of his next thought and had nothing to do with Apple’s plans for had to do with both events.

The story has been updated with this correction so people didn’t think AI news would be announced on iPad event scheduled for May 7th. (You can read the backstory to the corrections here on 9to5Mac.)

While we didn’t expect to hear much or anything about AI until at least WWDC, this correction essentially confirms that point in time.

Apple is taking a hybrid approach to AI investments

The biggest AI news, however, is something Cook said about Apple’s CapEx spending, which is money spent on fixed assets like servers and data centers, real estate, and more.

While it’s not often the most interesting topic, the company’s response this time hinted at Apple’s AI investment plans. As technology investor MG Siegler pointed out on his blogApple CFO Luca Maestri responded to a question about the impact of generative AI on Apple’s historical CapEx pace by explaining that Apple follows a hybrid model, “where we make some of the investments ourselves, in other cases we share them with ours.” Suppliers and partners…”

Additionally, he added, Apple is “doing something similar on the data center side. We have our own data center capabilities and then leverage third-party capabilities.”

“It is a model that has worked well for us in the past and we plan to continue doing so in the future,” Maestri said.

Siegler interpreted this to mean that Apple does not need to spend on CapEx because Apple does not plan to immediately build and train LLMs (large language models) on its own servers.

And if you squint a little, this could also be another signal that Apple may be looking for third parties to power its AI services. As Bloomberg reported in April, Apple has held discussions with ChatGPT maker OpenAI and Google to power an AI chatbot that appears in an iOS 18 update.

Since Apple has confirmed that its capital expenditures will not be affected by its near-term AI plans, it is likely that Apple plans to contract with partners for AI services in addition to the tasks the company performs on the device and can handle yourself, are offered. It remains to be seen whether Apple will shift the balance over time and use more of its own servers and data centers.

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