EP 567: Apple’s AI Challenges — What Went Wrong with Siri?
🎯 Summary
Podcast Summary: EP 567: Apple’s AI Challenges — What Went Wrong with Siri?
This episode of the Everyday AI Show focuses on the significant struggles Apple is facing in the generative AI space, highlighted by a recent Bloomberg report suggesting Apple is seeking external partnerships with competitors like OpenAI or Anthropic to power a smarter Siri. The host argues this move signals the beginning of the end for Apple as a leading AI innovator.
1. Focus Area
The primary focus is Apple’s failure in Generative AI development, specifically concerning the long-delayed and underperforming Siri assistant (dubbed “Apple Intelligence”). The discussion contrasts Apple’s internal struggles with the aggressive AI advancements made by competitors like Google and Meta.
2. Key Technical Insights
- Internal Model Underperformance: Apple’s internally developed Large Language Models (LLMs) reportedly performed 20% worse than aging competitor technology, forcing the pivot away from in-house development.
- Vertical Integration Failure: The necessity of outsourcing core intelligence technology (Siri) to external LLM providers marks a significant departure from, and failure of, Apple’s legendary vertical integration strategy.
- Edge AI Limitations: While Apple has small language models capable of on-device processing, the inability to build competitive generative models for complex reasoning has stalled their overall AI progress, contrasting with Google’s successful integration of models like Gemma across Android.
3. Business/Investment Angle
- Strategic Pivot as Admission of Failure: Seeking external LLMs is framed not as a strategic partnership, but as an admission that Apple cannot keep pace in the generative AI arms race, which the host views as the next global economic leap.
- High Cost of Dependency: Negotiations with Anthropic stalled over pricing, with Anthropic reportedly demanding a multi-billion dollar annual investment from Apple, indicating the high financial pressure of relying on external leaders.
- Talent Drain and Investment Gap: Apple is criticized for “Scrooge McDucking” on AI investment compared to rivals like Meta (which is spending billions and poaching top talent), leading to a lack of innovation and credibility in the AI research community.
4. Notable Companies/People
- Apple: The central subject, criticized for marketing “Apple Intelligence” without substance, leading to class-action lawsuits and ridicule.
- Mark Gurman (Bloomberg): The source of the critical report detailing Apple’s outreach to competitors.
- Anthropic & OpenAI: The primary external candidates being courted to power the next-generation Siri.
- Google: Cited as a successful recovery story, moving from a shaky Bard launch to leading the AI space by integrating capable edge AI (Gemma models).
- John Giannandrea: Apple’s AI chief, who was reportedly removed from his post months prior to this crisis.
5. Future Implications
The conversation suggests that Apple risks becoming a long-term dependent on external AI providers, fundamentally undermining its competitive edge in the most important technology sector. If these external deals are finalized, it signals a permanent shift where Apple focuses on hardware integration rather than foundational AI innovation, potentially leading to a sustained decline in its status as a world innovator.
6. Target Audience
This episode is highly valuable for Technology Executives, AI/ML Professionals, and Tech Investors who need a concise, critical analysis of major industry shifts and the strategic positioning of market leaders like Apple in the generative AI landscape.
🏢 Companies Mentioned
💬 Key Insights
"the future of our lives is generative AI in the same way that you could say right now most of our lives revolve around or are dependent on the internet or maybe social media for bad reasons, the same is going to be true and is already proving to be true for generative AI."
"before the generative AI boom, right? So if you go back like five years, Apple was crushing everyone in terms of market cap... Fast forward to today, Apple is third, right? And their competitors, some of their closest competitors like Microsoft and Alphabet/Google, they've grown at a much faster rate than Apple has. And I think one of the main reasons is because of every other company's investments and results and outputs in generative AI"
"this is a public admission that Apple's famous vertical integration strategy is failing."
"the most important technology in the world right now is not in smartphones, it's not AirPods. It is generative AI"
"And this is a public admission that Apple's famous vertical integration strategy is failing."
"This is the first time that Apple has gone through a major outsourcing of a core intelligence technology in the company's history."