Three things we learned about Apple’s AI plans from its results

Apple CEO Tim Cook didn’t reveal much about the company’s AI plans during Thursday’s second-quarter earnings conference call with investors, but he did confirm a few information on how the tech giant plans to move forward with artificial intelligence.

His comments notably suggest that despite spending more than $100 billion on R&D over the past five years, Apple does not plan to create too many new data centers to run or train AI models. Instead, when it comes to AI, it will continue to take a “hybrid” approach, as it does with other cloud services, the company told investors.

AI will extend to devices beyond the iPhone

We also learned that Apple sees AI as a key opportunity for the “vast majority” of the company’s device lineup, not just the iPhone. Although we’ve known this for a while – after all, Apple called its M3 MacBook Air “the best consumer laptop for AI” – the company shouted out how AI is used in its products during its call to the results.

“I think AI – generative AI and AI – both represent big opportunities for us across our products, and we’ll be talking more about them in the coming weeks. I think there are a lot of ways to do that that are great for us, and we think we’re in a good place,” Cook said.

In addition to the MacBook Air, the Apple Watch uses AI and machine learning in features like irregular heartbeat notifications and fall detection, Cook noted. And when talking about the company, the CEO referred to larger companies buying and exploring use cases for Vision Pro, while adding that he wouldn’t want to “confine this just to AI.”

“I would just say that we see generative AI as a key opportunity for our products. And we think we have advantages that set us apart there,” Cook said.

AI probably won’t be present at this month’s iPad event

However, customers eager to have an AI-powered Siri will have to wait a little longer for this news, which has long been expected to be announced at Apple’s Worldwide Developers Conference (WWDC) in June. When Cook was asked Thursday how AI would affect consumer demand for new devices like the iPhone, he said that when it comes to generative AI, we wouldn’t see any impact “over the next quarter or so,” but said he was “extremely optimistic” about the technology.

Apple doesn’t plan to make any bigger AI announcements until WWDC.

The discovery was the result of a correction to a CNBC report, which misinterpreted a statement made by Cook to apparently indicate that there would be “big plans to announce” from an “AI perspective.” at both upcoming events, including next week’s iPad event. and WWDC in June. But as subsequent corrections show (probably after some prodding from a frantic Apple communications team), Cook had paused before saying “…from an AI perspective…”, which was the start of his next thought and was not related to Apple’s plans for the two events. .

The story was updated with this correction so people didn’t think AI news would be announced at the iPad event scheduled for May 7. (You can read the story of the fixes here on 9to5Mac.)

While we didn’t expect to hear much about AI until at least WWDC, this fix basically confirms that timing.

Apple takes a hybrid approach to AI investments

The biggest news in AI, however, is Apple’s capital spending, which is money spent on fixed assets, like servers and data centers, real estate and more.

While it’s not often the most interesting topic, this time the company’s response hints at Apple’s plans to invest in AI. As tech investor MG Siegler pointed out on his blog, Apple CFO Luca Maestri responded to a question about the impact of generative AI on Apple’s historic CapEx pace by explaining that Apple was pursuing a hybrid model, “in which we make some of the investments ourselves, in other cases.” we share them with our suppliers and partners…”

Additionally, he added, Apple is doing “something similar on the data center side.” We have our own data center capacity and then use third party capacity.

“This is a model that has worked well for us historically, and we plan to continue on the same path in the future,” Maestri said.

Siegler interpreted this to mean that Apple would not need to spend on CapEx, because Apple does not plan to immediately create and train LLMs (large language models) on its own servers.

And, if you squint a little, this could also be another signal that Apple might turn to third parties to power its AI services. As Bloomberg reported in April, Apple has held discussions with ChatGPT maker OpenAI and Google to power an upcoming AI chatbot in an iOS 18 update.

With Apple confirming that its CapEx would not be affected by its AI plans in the near term, it is likely that Apple is considering some sort of deal with partners for AI services in addition to what it can manage on the device and by itself. It remains to be seen whether Apple will eventually shift the balance to use more of its own servers and data centers over time.