Apple Brings ChatGPT and More Artificial Intelligence to Devices, Wall Street Isn’t Impressed

Authors: Aditya Soni and Max A. Cherney

(Reuters) – Apple unveiled its long-awaited artificial intelligence strategy on Monday, integrating new “Apple Intelligence” technology into a suite of apps including Siri and bringing its OpenAI ChatGPT chatbot to its devices.

During a nearly two-hour presentation at Apple’s annual developer conference, executives including CEO Tim Cook touted how the Siri voice assistant will be able to interact with messaging, email, calendar, as well as third-party apps. Siri will be able to write emails and change the tone of voice depending on the occasion.

The iPhone maker, long known for its focus on user security, also signaled that it plans to differentiate itself from rivals Microsoft and Google by putting privacy “at the center” of its features.

But Wall Street – looking for more dazzling AI features and assurances that will put Apple in a good position to compete on AI with market leader Microsoft – hasn’t reacted indifferently to the event. Apple shares fell almost 2%.

Apple shares, which have been on par with other Big Tech stocks this year, rose 13% last month in the lead-up to the event.

“There is nothing here that will move the brand forward on the expected incrementalist trajectory,” said Dipanjan Chatterjee, an analyst at Forrester.

“Apple Intelligence truly delights its users in small but meaningful ways, it elevates Apple to where its competitors are, but not head and shoulders above.”

Apple’s approach contrasts with rivals’ enterprise focus. The company hopes these moves will convince its more than one billion users – most of whom are not tech aficionados – of the need to use the emerging technology.

Apple CEO Craig Federighi called Apple Intelligence “artificial intelligence for all of us.”

Apple remains overly dependent on iPhone sales, and some analysts say it’s unlikely any boost from new AI features will come in the near term.

“At this early stage of the race, Alphabet and especially Microsoft seem to be in better shape after their initial moves and thanks to cloud resources,” said Paolo Pescatore, analyst and founder of PP Foresight.

The AI features announced at the Apple Worldwide Developers Conference will be available in the latest device operating system, which was also unveiled at the event.

Apple uses this event every year at its headquarters in Cupertino, California, to showcase updates to its own apps and operating systems, as well as to show developers new tools they can use in their apps.

SIRI RENOVATION

The revamped Siri will have more control, helping it do what has proven difficult in the past because the assistant had to understand the user’s exact intentions as well as how the app worked.

Siri will also leverage ChatGPT expertise and obtain user consent before querying the OpenAI service as part of Apple’s partnership with the Microsoft-backed startup, a privacy feature Apple has highlighted.

But the connection immediately raised questions about privacy.

Tesla CEO Elon Musk said on X that he would immediately ban the use of Apple devices at his companies if the iPhone maker integrated the startup’s technology at the operating system level.

ChatGPT integration will be available later this year, along with other artificial intelligence features, Apple said, adding that access to the chatbot will be free and user information will not be logged.

Later on Monday, Apple released a document detailing how its features, including those powered by OpenAI, will keep customer data safe. This includes Apple servers handling more complex tasks as part of a new offering called Private Cloud Compute.

Apple also said it plans to add technology from third-party artificial intelligence companies to its devices after reports it was discussing a potential partnership with longtime search partner Google.

To support AI features, Apple plans to use a combination of on-device and cloud computing. This means that AI features will only be available on the latest iPhones, starting with the iPhone 15 Pro, as well as upcoming models.

The company, which has long opposed processing consumer data in the cloud due to privacy concerns, said its approach would provide greater privacy protections as it plans to use its own chips with security features in data centers.

Analysts say using its own chips could also help Apple avoid spending on expensive Nvidia chips.

Apple says the new iOS 18, the software powering its flagship device, will make the iPhone’s home screen more customizable.

It will come with an ‘app blocker’ feature that will help people protect sensitive information. Users can choose to block specific applications and have better control over data within the operating system.

The company is also making its Vision Pro mixed reality headset available in eight more countries, including China and Japan. The new VisionOS 2 software for the headset will use machine learning to create photos with natural depth and will support new gestures.

(Reporting by Stephen Nellis, Max A. Cherney and Jeffrey Dastin in San Francisco and Aditya Soni, Yuvraj Malik, Pushkala Aripaka and Aatrayee Chatterjee in Bengaluru; Editing by Sayantani Ghosh, Peter Henderson, Matthew Lewis and Jamie Freed)