Is AI making a comeback? Is Apple about to enter the "burning money mode"?

Apple is currently strategically promoting the development of its artificial intelligence (AI) technology in an attempt to catch up with Google and Microsoft's leading positions. "The analyst who knows Apple best," Ming-Chi Kuo, recently stated that Apple may spend billions of dollars to purchase AI chips from NVIDIA to support server computing power. In addition, Apple's generative AI feature is expected to be integrated into the new version of Siri, which will be released next year.

Kuo said that Apple will spend at least $620 million this year to purchase 2,000 to 3,000 AI servers, and the investment will increase dramatically to $4.75 billion next year, with the purchase quantity skyrocketing to 18,000 to 20,000 units. Apple has not yet responded to this.

Kuo's assumption is that Apple will purchase the most popular AI server configuration, which is to install 8 NVIDIA H100 chips per server. However, there is currently a shortage of NVIDIA chips, which means that large-scale purchases may not occur until next year.

However, despite this, Apple's investment in AI is still far less than that of other competitors. Meta Platforms, the parent company of Facebook, previously stated that it has spent billions of dollars on AI infrastructure, which will be the company's largest single investment. Kuo predicts that Meta will purchase approximately 40,000 AI servers next year.

Overall, Apple generally avoids publicly discussing its development goals in AI. Apple itself does not have any business that provides AI models accessed through cloud computing platforms, like Microsoft and Google.

However, there have been reports that Apple plans to spend $1 billion annually on the development of generative AI, including the new version of Siri that may be released next year. In July of this year, there were also reports that Apple is developing its own generative AI tool. Last year, Apple created the framework Ajax for developing large language models and has already developed an Apple GPT similar to ChatGPT using Ajax.

According to the media reports at that time, Apple is researching and improving underlying models, but currently has no plans to release them to consumers. Executives have not yet determined how to release AI tools. Some commentators believe that the key for Apple now is to determine whether the AI technology it possesses is sufficient to compete in the technology industry and how to truly apply AI technology to its own products.

On the 24th, Apple's stock price fell 0.18% to $172.69 during the US stock market session. The company's stock price has risen more than 38% so far this year.

According to previous reports by Wall Street News, John Giannandrea and Craig Federighi, senior vice presidents responsible for AI and software engineering at Apple, are leading the AI efforts. They are referred to as the "executive initiators" of generative AI development within Apple. Eddy Cue, senior vice president in charge of Apple services, is also involved. Currently, these three Apple executives plan to invest $1 billion annually in the development of AI products. In addition, Jeff Pu, an analyst at Haitong International Securities, previously wrote that Apple plans to integrate generative AI technology into the iPhone and iPad as early as the end of 2024. Apple will provide a combination of cloud AI and "edge AI". Apple is also deciding how to legally and compliantly use customer personal privacy data, so it will take some time before we can see Apple's GPT. If the plan progresses as scheduled, Apple's AI may be implemented by the end of 2024, and it is likely to start introducing generative AI features from iOS 18 and iPadOS 18.