Apple Is One Big Tech Company Without a Clear ChatGPT Strategy

The global buzz around ChatGPT, as well as the rush to imitate it, is reminiscent of the launch of an Apple Inc. product. Everyone is excited to give it a go, and other IT firms are spending late hours to reverse engineer it.

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Apple is nowhere to be seen this time. Has the world's most powerful IT firm been caught off guard by the pace of it all?

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Microsoft Corp. has invested $10 billion in OpenAI, the creator of ChatGPT, and changed the way it constructs server farms to accommodate more of Nvidia Corp.'s class-leading processors for artificial intelligence training. Google, a subsidiary of Alphabet Inc., has made reacting to ChatGPT a high priority. Amazon.com Inc., through its cloud business, has also entered the game.

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That's four of the world's top seven most valuable corporations, and the most valuable of them all appears to be unprepared for what's to come. Bloomberg reported on an internal AI conference conducted by Apple in February, during which machine learning and other deployments of the technology across Apple products were reviewed, but there was no mention of generative AI.

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AI in Apple products today is like irrigation for its walled garden; it's necessary and beneficial for an expanding variety of activities, but ultimately, Apple sells physical fruit. The arrival of generative AI might be like a tidal wave.

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Apple appears to have lost its edge since being the first major tech company to develop an AI-powered voice assistant. Siri was faulty from the start, but it appears archaic by ChatGPT standards.

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Companies require large, customized processing clusters costing hundreds of millions of dollars to participate in this new AI race. Apple's cloud services are not its greatest strength right now, since its senior executive for that business is departing, and iCloud has been the subject of sorrow in this newsletter. The corporation is putting enormous resources into the augmented-reality headgear that will be unveiled in June, as well as the long-delayed, capital-intensive automobile endeavor.

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To be sure, Apple's AI has continually improved, and the technology has crept into more and more of the company's gadgets. Most of Apple's AI research is focused on increasing the usability of its products, rather than on Siri itself.

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Several camera advances, such as Photographic Styles and the ability to extract a topic from a shot, rely on AI. The self-driving car is a massive AI effort, while the headgear will use AI to analyze a wearer's surroundings in real time and build lifelike avatars.

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Apple may believe that it does not need to compete in the field of generative AI. Whoever wins will most likely distribute their services in the form of an app on Apple's App Store. But what if, as industry pioneer Kai-Fu Lee predicted, AI reaches its full potential and becomes the post-mobile platform? Lee anticipates an acceleration in the development of AI as the foundation for building goods and services.

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Apple should look to its past for guidance. In the early days of the iPhone, it vanquished Nokia and BlackBerry not by improving the physical keyboard, but by removing it entirely.

Today's dangers to its economic empire will not come from Xiaomi Corp. or Samsung Electronics Co. producing iPhone-like items. As our whole interaction with technology changes, when the focus turns to these cloud-based AI services — and, crucially, the data troves necessary to train and enhance them — Apple may feel less at ease.

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It's an incredible accomplishment for Sam Altman and his startup OpenAI to grab people's imaginations in a manner that few companies outside of Apple ever do. The resulting surge of new services is likely to be transformational.

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What they signify for Apple in the long term is up to the firm to decide. According to Alibaba Group Holding Ltd. CEO Daniel Zhang, all IT businesses are "at the same starting line."

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