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May 10, 2024, 6:09pm EDT
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Worried about falling behind, Apple reorganizes around AI

Insights from The New York Times, Financial Times, and South China Morning Post

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Apple CEO Tim Cook attends the 'Wonderlust' event at the company's headquarters in Cupertino, Calif., on Sept. 12, 2023.
Loren Elliott/REUTERS
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Apple is making some big changes over concerns that other companies’ progress on artificial intelligence could topple its dominance in the global smartphone market. First up: Developing an in-house generative AI tool to make Siri more useful.

In an effort to play catch up, the tech giant is undergoing its most significant reorganization in more than a decade, The New York Times reported, including canceling its doomed self-driving car project and reassigning hundreds of engineers to work on AI instead.

“We believe in the transformative power and promise of AI and we believe we have advantages that will differentiate us in this new era,” CEO Tim Cook said in February.

The improved Siri is meant to be more private than rival AI services, the Times reported, because it will process requests directly on iPhones rather than remotely in the cloud. If the effort fails, Apple fears the iPhone could become a “dumb brick” compared to newer technology, the paper wrote.

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Semafor Signals: Global insights on today's biggest stories.

Apple tries to play catchup after a decade of AI research secrecy

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Sources:  
The New York Times, Financial Times

Apple has fallen behind in the AI race partly because of a decade-long challenge in recruiting and retaining top AI researchers, who are resistant to join a secretive company, The New York Times reported; Apple publishes far fewer AI research papers than its rivals and limits its participation in conferences. But some observers believe Apple might be biding its time. “They tend to hang back and wait until there is a confluence of technology, and they can offer one of the finest representations of that technology,” Igor Jablokov, chief executive of AI enterprise group Pryon, told the Financial Times.

AI push comes as Apple tries to put out fires everywhere

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Sources:  
PR Daily, The Washington Post, CNN

Apple’s AI scramble comes as the company faces a slew of crises, including increasing antitrust scrutiny in the US and EU, and a recent public relations mishap: Intense backlash for a new iPad Pro ad prompted a rare apology from the company. Apple also reported its biggest quarterly revenue decline in more than a year this month, and Microsoft dethroned it earlier this year as the world’s most valuable company. “Apple always seems to pull a rabbit out the magic hat every time,” a tech analyst told The Washington Post, “but it just feels like the options for doing so are getting smaller and smaller.”

Geopolitics are souring Chinese consumers on US products

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Sources:  
The Washington Post, The New York Times, South China Morning Post, Semafor

The iPhone has long been a status symbol in China, but as “geopolitical tensions have soured some consumers on US brands,” Apple has taken a hit with Chinese users, The Washington Post reported. It’s possible that the iPhone makes a comeback, analysts said, but anti-US sentiment could also rise if Washington bans Chinese-owned TikTok. Apart from nationalism, Chinese consumers are also turning to local brands for their low prices and innovation; Chinese smartphone companies have recently been flexing their AI integrations. The pressure that US companies face from increasingly innovative Chinese competitors, “is much bigger than that from geopolitics,” the chairman of McKinsey Greater China told the South China Morning Post.

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