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Apple's artificial intelligence strategy has been undergoing intense development, raising new questions about the company's direction. Reports indicate that Apple has invested $10 billion in AI but has yet to achieve significant results. This situation is compounded by the recent defection of Ruoming Pang, a high-level AI executive, who left OpenAI to join Meta's Superintelligence Labs. Additionally, the launch of an upgraded version of Siri has been postponed until mid-2026.
Apple's central generative AI platform, Apple Intelligence, is currently not meeting public expectations in AI ratings. As competitors rapidly expand their offerings of new generative AI tools, investors are becoming increasingly cautious. Although Apple announced plans to integrate OpenAI into Siri, this has not yet occurred a year later. This delay may further diminish the company's competitiveness.
In addition to challenges with AI performance, Apple is facing issues in its more traditional revenue streams. The App Store, which has long been a significant source of profit, is under threat due to a series of court rulings that allow creators to bypass the established in-app payment structures. As a result, companies like Spotify, Netflix, and Amazon have taken steps to encourage users to leave the platform.
Google pays Apple $20 billion each year to ensure that its search engine remains the default option in the Safari web browser. However, this arrangement may be at risk due to an ongoing antitrust case being handled by the U.S. Department of Justice, which could lead to the termination of the agreement. Additionally, as the market shifts toward AI-driven search models, the strategic importance of having a default browser may diminish in the long run.
To counter such pressures, Apple is considering strategic moves to strengthen its AI capabilities. Some of the possible solutions include adding AI-specific fees for app developers, establishing a joint venture with Meta to use its OpenAI Llama, or acquiring OpenAI. There is, however, intense rivalry when it comes to AI skills and innovation. Firms such as Google and Meta have achieved remarkable rates of hiring and product releases, while smaller firms, like Perplexity AI, continue to grow at a significant rate.
Although the iPhone remains the mainstay of Apple's revenue, current profits are diminishing, indicating more systemic threats. Google Android OEMs are now releasing AI-enabled products, and new GenAI-native ecosystems are emerging. As a result, Apple may need to accelerate its development pace to maintain its position in the technological market.
