Apple May Use Outside AI to Power Siri in Major Reversal

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Bloomberg Jul 1 10:11 · 12.1k Views

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00:00 Right.
00:00 Their strategy for artificial intelligence that they unveiled last year
00:04 was twofold.
00:06 In house models that run on the phone and
00:08 in house models that run on the cloud,
00:10 right?
00:11 That competes with ChatGPT, with Claude, with Gemini,
00:15 with the market.
00:16 And Apple has figured out pretty quickly they're not very good,
00:19 right?
00:20 So Apple is now evaluating for the first time
00:22 using a third party model, either Claude from Anthropic or ChatGPT from Open AI
00:28 to Power Siri.
00:30 Obviously, as we all know and experience in our day-to-day lives, Siri is not very good.
00:34 And Apple had been working on an overhaul of Siri using its own large language models for next spring.
00:40 Now it's exploring maybe using cloud or ChatGPT instead
00:44 in order to get new features out the Dome more quickly
00:46 and make the Voice Assistant more appealing.
00:48 So it is a pretty big development.
00:50 And you see that Apple stock spiked on the news.
00:52 Because
00:53 if they do indeed go down this road, which by the way, is not for certain by any means,
00:59 it's going to mean Apple's going to be a real AI player for the first time.
01:02 How much
01:03 time do they have, Mark?
01:05 I mean, I guess
01:07 I feel like
01:09 any company that wants to compete has to have
01:13 a a successful AI offering.
01:16 On the other hand, this is a company that already has us
01:20 kind of,
01:21 I own me and my family exactly.
01:25 And me and my family as well, right?
01:27 I,
01:27 I can't imagine living without the genius of their products.
01:30 And I really feel like an emotional connection to Apple.
01:33 On the other hand, they have utterly failed in this sense.
01:37 Carol, Carol reminded me that Siri is now 14 years old and she is
01:42 more incapable than my 4 year old.
01:46 You guys are very focused on your your current setup.
01:49 You're focused on
01:50 the current generation of, of consumers.
01:52 You're concerned about your families, right?
01:55 What Apple's concern is and what
01:57 my concern is and the market's concern
01:59 is the next generation of consumer, they're going to lose a whole bunch of people that are new to the smartphones.
02:05 There are people born every day.
02:06 There are people who buy their first smartphone every day.
02:09 There are families getting their first smartphones every day,
02:11 right?
02:12 And those people have a decision make to make about which ecosystem they want to enter.
02:16 And right now,
02:17 all the talk is about how Apple's AI
02:20 is
02:21 completely behind the times.
02:23 And so that decision, right,
02:25 is a lot easier when you realize that the Android ecosystem is a big step ahead in what is perceived as the future of technology.
02:32 What does he say about Apple as a company?
02:34 Like this would be a real big shift, right in strategy
02:37 Are are
02:38 you help me out here, right?
02:39 Apple likes to go in house for core technologies.
02:42 Like I've said many times before, AI
02:44 is as core as technology for the future of hardware as the touchscreen has been for technology over the past 20 years,
02:50 right?
02:51 Apple owns the technology and the patents and everything behind touchscreen and multi touch, those gestures that we all take for granted today
02:58 with AI.
02:59 Apple has tried to do something similar, build those models in house and own the core tech like they own the touchscreen, like they own some of the camera tech, like they own with their processors and all their products now.
03:09 But what are you supposed to do?
03:10 If it's not very good?
03:11 You have to find an alternative.
03:13 You have to go outside and use a partner.
03:15 They tried to go in house, it didn't work.
03:17 They're going to pull back.
03:19 In my view,
03:20 go external,
03:21 use external partner and maybe one day do a brain transplant when your LLMS that you're building internally are good enough for prime time, but something's got to give.
03:30 Interestingly, they are working concurrently on a new Siri LLM project that uses in house models.
03:36 And so there's still many debates internally and options being poured over to decide if they're going to go with Entropic open AI or Apple Foundation models for this revamp.
03:45 Siri coming next spring,
03:47 by the way,
03:49 are there
03:50 AI companies that are in the lead?
03:51 Like is Open AI
03:53 doing
03:54 better work at least in terms of the products that we can access now than Anthropic, than Google, than Facebook?
04:02 You talked to a bunch of people in the industry.
04:04 You're going to get different opinions.
04:05 I would say the top 2
04:07 are Anthropic or Open AI, Google and 3rd.
04:10 And if you want to talk about the big companies metaphor and rounded out with Apple, if you're going just for the
04:15 top five biggest companies that have some,
04:18 you know, meaningful share of the space,
04:21 you talk to people at Apple though the word on the street there is it's all about anthropic.
04:26 And so anthropic is really the focus of Apple for this new generation of Siri.
04:31 They're using Anthropic to power a lot of their internal AI technology.
04:35 But again, as I say in my story, Enthropic wants a billions of dollars at a scale that double S annually for series to be powered by Claude.
04:43 And so Apple is now taking a close look at open AI as well, which has historically given Apple
04:47 extraordinarily favorable terms.
04:49 Is that a desperation or smart move
04:51 in terms of what Apple's doing?
04:53 It's a smart move in response to desperation.