Editor's note: “Apple Intelligence: The Next Frontier in AI Development” was previously published in June 2024. It has since been updated to include the most relevant information available.
At the moment, the most powerful companies in the world are racing to develop advanced artificial intelligence. Like the Titans. Microsoft (MSFT) Amazon (AMZN) the alphabet (Google) Meta (Meta) Tesla (TSLA) and others have poured billions of dollars into building their own AI technologies. But we think that eventually, a significant underdog will win the race. So, which AI do we predict to take the crown? apple (AAPL).
Throughout 2023 and the first half of 2024, Apple was relatively quiet about its AI development. While rivals like Microsoft have invested multi-billion dollars in startups and announced new AI products and services, Apple hasn't done much… Until last month.
At its annual Worldwide Developers Conference (WWDC) on June 13, Apple introduced the Apple Intelligence – Its brand new proprietary AI ecosystem.
And we believe this newly introduced technology can change the AI landscape.
What is Apple Intelligence?
At its core, Apple Intelligence is focused on hyper-personalized AI.
In particular, Apple is trying to turn its iPhone into a hyper-personalized AI assistant. Think JARVIS. Steel man – A powerful system that understands and responds to human speech, recognizes voices, and rapidly analyzes data to support research and decision-making. That's what Apple Intelligence is all about.
In other words, Apple isn't trying to build AI that will help companies automate tasks, create better products, or market more effectively. It is not working to help investment managers better manage the risk in their portfolios.
Instead, it's focused on building AI that will help people around the world do everyday tasks a little easier. And at scale, it can be very valuable.
Imagine your iPhone equipped with a customized AI model tailored specifically to your wants and needs. It knows your favorite restaurants, what sports you follow, what news you read, how you compose emails and texts, what music you listen to, what you watch.
It will know everything about you. And it can help you do almost anything.
Having trouble picking a restaurant for date night? Not sure which movie you want to watch? Struggling to find new music you enjoy or don't like that email you just created? Let your Apple Intelligence help you.
This is the future of AI.
Apple: Building the Future of AI
Now, admittedly, Apple's first steps in this arena are small.
When it launched Apple Intelligence, the company introduced some new features.
For starters, Siri is getting a major upgrade and will be able to pull data to perform cross-app actions (like making a dinner reservation you discussed in an iMessage conversation and adding it to your calendar). Apple also announced AI-powered content creation tools like Genmoji (where you can use AI to create your own emojis). And it revealed the upcoming integration with ChatGPT for all iPhones.
Now, these are all fantastic developments – although they are hardly landmark announcements.
But don't interpret this current decline as Apple being unable to compete in the AI race.
After all, as the old saying goes, a journey of a thousand miles begins with a single step.
And just a few weeks ago, Apple took the first step on its AI journey.
It will take many more steps in the coming months.
And we think Apple will become intelligence when the journey is complete. The most transformative AI on the planet.
The last word
Just think of all the data your iPhone collects every day – your music streams, YouTube views, news feeds, messages.
Apple has all the personal data it needs to build deep, hyper-personalized AI.
But when it comes to building great AI, data is only half of the equation.
In fact, AI is like a car. It needs a great engine and a lot of fuel, which in this case is data.
Apple has tons of fuel — but not a great engine. That's where OpenAI comes into play.
The company behind ChatGPT has the world's largest AI models – the best “engine” in the AI race.
And Apple recently confirmed that it's working with the firm to natively integrate ChatGPT into the iPhone via Siri.
Judging by Apple's other announcements, such as AI-powered content production (which ChatGPT is really good at), it looks like the company is using OpenAI's models throughout its Apple Intelligence system.
With data from Apple and AI models from OpenAI, Apple Intelligence is equipped with the most fueled and best engine in the AI race.
This is why we believe that Apple Intelligence can, over time, become the best AI in the world.
Regardless, Apple's long-awaited entry into the AI race is a huge moment for the industry.
All the major tech companies in the world are now involved with AI…
Which means you should probably be all in, too.
Find our favorite AI stocks to buy now.
As of the date of publication, Luke Lango had no position (directly or indirectly) in the securities mentioned in this article.
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