Apple Inc. AAPL has made a strategic move to bolster its artificial intelligence (AI) capabilities by acquiring a Canadian AI startup, DarwinAI. This acquisition is expected to significantly influence the development of future iPhone and iPad features.
What Happened: Apple is on the verge of unveiling “Project Graymatter,” a suite of generative AI features and services set to debut with iOS 18 this fall, according to Bloomberg's Mark Gurman.
DarwinAI’s expertise lies in quickly examining chips and other hardware components at the start of the manufacturing process to ensure their proper functioning.
However, Apple’s interest in the company is primarily due to its technology, which can shrink AI models and neural networks to enhance on-device operations.
These AI features are expected to be a key component of Apple’s upcoming iOS and iPadOS 18 updates. The company is positioning this software as one of the most significant updates in the 16-year history of the iPhone.
These AI features, as part of "Project Graymatter," are expected to be a "huge part" of the iOS 18 update.
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Notably, Apple's attempt to license Alphabet Inc.'s GOOG GOOGL Google Gemini AI models is a separate endeavor, but it's not clear yet if it's a stop-gap solution till Apple's own AI models are ready for iPhones.
Why It Matters: Over the past decade, Apple has been quietly acquiring more startups in the AI space than most of its rivals. This strategic move to enhance its AI capabilities is now coming to fruition with the acquisition of DarwinAI.
Furthermore, Apple’s potential integration of Google’s Gemini AI models into its new iPhone software features, combined with DarwinAI’s technology, could position Apple as a leader in personalized AI.
This could also result in substantial annual payments from Apple to Google, further strengthening their partnership.
Price Action: Apple, which gained 0.64% to $173.72 on Monday, slipped 0.24% in Tuesday’s premarket trading, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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