Apple Caught Off Guard By Industry's Sudden AI Fever As Executives Fret Over 'Pretty Big Miss,' Says Gurman — Here's Where Tech Giant Is In Its Pursuit

Apple, Inc. AAPL has been late to the AI party, with the likes of Microsoft and Alphabet’s Google already making huge strides in the arena. Bloomberg’s Mark Gurman in his latest installment of the weekly “Power On” newsletter delved into what the tech giant has been up to.

Pretty Big Miss: So far, the only noteworthy AI release from Apple is an improved auto-correct feature in iOS 17, Gurman said on Sunday. Although Apple CEO Tim Cook said the company has been working on generative AI tech for years, Gurman said, “Apple executives were caught off guard by the industry's sudden AI fever and have been scrambling since late last year to make up for lost time.”

Citing a person with knowledge of the matter, the Apple specialist said, “There’s a lot of anxiety about this and it's considered a pretty big miss internally.”

Way Forward: Gurman noted that Apple is working on its own large-language model called Ajax and has rolled out an internal chatbox dubbed “Apple GPT” to test out the functionality. The next important step is determining whether the technology is competitive with rivals and how Apple can apply it to its products, he said.

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The executives involved include Apple's senior vice presidents in charge of AI and software engineering, John Giannandrea and Craig Federighi, as well as Eddy Cue, the head of services, Gurman said. The company is likely to spend about $1 billion per year on the efforts, he added.

Giannandrea, Gurman said, is overseeing development of the underlying technology behind the new AI system, and his team is revamping Siri in a way that can implement the technology. This “smarter” version of Siri could be ready as soon as next year, he said.

Federighi's software engineering group is adding AI to the next version of iOS, Gurman said. He expects the new features to improve how both Siri and the Messages app can field questions and auto-complete sentences. The columnist said the software engineering team will also look to integrate AI into development tools like Xcode, a move that could help app developers write new applications more quickly.

Cue's team, on the other hand, is pushing to add AI to as many apps as possible, including Apple Music, Gurman said.

The Apple team, however, is debating whether to deploy AI as a completely on-device experience, a cloud-based setup or something in between, Gurman said.

“Generative AI has quickly become much more than a buzzword and will be central to the next several decades of computing,” he said.

Apple ended Friday’s session down 1.47% at $172.88, according to Benzinga Pro data.

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