Apple to Spend $1 Billion Annually to Catch Up on AI Efforts: Report

Apple is intensifying its efforts to catch up in the rapidly evolving field of generative Artificial Intelligence (AI), reportedly allocating about $1 billion per year for the initiative, says Bloomberg’s Mark Gurman.

The move comes after the company largely remained on the sidelines while competitors like Google, Microsoft, and Amazon made significant advancements in AI technology. OpenAI’s ChatGPT has made any AI efforts from Apple look like child’s play so far.

“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,” reports Gurman.

Apple CEO Tim Cook confirmed that the company has been working on generative AI technology for years. However, the only significant AI release from Apple recently was an improved auto-correct system in iOS 17. The company is now testing its own large language model called Ajax and an internal chatbot named “Apple GPT.”

John Giannandrea, Apple’s Senior Vice President in charge of AI, is overseeing the development of the underlying technology for a new AI system. His team is focused on revamping Siri to deeply implement AI capabilities. Craig Federighi, Senior Vice President of Software Engineering, is adding AI features to the next version of iOS, aiming to improve Siri and the Messages app. Eddy Cue, the head of services, is also involved in the project, claim sources.

“The trio are now on course to spend about $1 billion per year on the undertaking,” say sources, reports Gurman.

Apple is also exploring the integration of generative AI into development tools like Xcode, which could accelerate app development. This would align Apple with services like Microsoft’s GitHub Copilot. Additionally, the company is considering new AI features for Apple Music and its productivity apps.

One internal debate focuses on whether to deploy generative AI as an on-device experience, a cloud-based setup, or a hybrid approach. An on-device strategy would offer faster processing and enhanced privacy, but a cloud-based approach would allow for more advanced operations.

It will be interesting to see if Apple can showcase a generative AI product that can compete with ChatGPT. For starters, Apple’s planned revamp of Siri should have happened years ago as that’s one of the company’s biggest disappointments (Siri is 12 years old and still pretty much useless).