Apple’s small-scale approach to artificial intelligence could yield huge profits for stock investors AAPL – TradingView News

At its global Apple developer conference AAPL stock has redefined what artificial intelligence means.

Apple Intelligence is a client-based, voice-activated system that uses all the data in Apple’s systems to organize your life.

This is in contrast to the centralized, brute force computation of massive databases offered by Microsoft MSFT and Alphabet GOOGGOOGLE.

Great AI is powerful and provides answers in the form of text, images, video or code. But Apple Intelligence is more personal.

Apple stock price

You also pay a different price for Apple’s intelligence. Thanks to Big AI, Cloud Czars pay with energy, buying billions of dollars from Nvidia NVDA Graphics processors processing huge data sets.

Apple Intelligence is a small artificial intelligence. Users pay with their data and privacy. Apple will draw answers from personal data in the Apple ecosystem. This means that Apple Intelligence scales to the digital assets you organize.

This doesn’t mean that Apple isn’t investing in hardware. However, most of these investments are located close to the edge of the network.

This approach has allowed Apple to recently increase its dividend and share buybacks without being threatened by its capital budget.

The Apple Intelligence announcement surprised those who were betting that Apple would follow other “Cloud Wizards” into the big pool of artificial intelligence. But Apple was looking for a ring that would hold all its products together.

Siri is the ring that connects them. The interface of the future will be voice, not touch. It will connect all your Apple devices, from Vision Pro to Mac, from iPhone to Watch.

On the day of the WWDC keynote, investors looked askance at Apple’s plan. Upon closer inspection, they cheered.

During the presentation of the keynote, Apple shares were sold for $192 per share. A few days later it sold for $207. According to Axios, this amounts to a meltdown of $312 billion.

A real threat

Apple’s tight control over its ecosystem has long been a target of antitrust regulators. This is the walled garden and secret of Apple’s huge profits, with 26% of second quarter revenues turning into net profit.

The day after the WWDC speech, four states joined the U.S. Department of Justice’s lawsuit alleging that the iPhone is an illegal monopoly. Apple believes it acts in the best interests of its customers’ privacy and security.

This pushback against antitrust laws is happening all over the world. In March, Europe fined Apple nearly $2 billion, saying it used its app store to “eliminate” music streaming competitors like Spotify PLACE.

India is considering introducing a regulatory system modeled on the European Union.

The partnership with OpenAI, offering ChatGPT through Apple products, with no upfront cash, is also under attack. Apple will offer access to ChatGPT from within its operating system, answering questions that the small artificial intelligence cannot handle.

Here again, Apple may be one step ahead of the government. Governments have focused on the iPhone, while Apple Intelligence connects users to many other platforms.

The EU doesn’t even consider Siri a core regulated platform.

Conclusion

Apple’s announcements at WWDC show that it has not only outpaced the industry, but also the government’s efforts to control it.

By focusing on and expanding its customers’ monopolies, Apple is taking an “asset-wise” approach to AI. It allows others to tackle data center modernization with expensive Nvidia chips.

Apple allows large language models to evolve by limiting user access to all solutions except OpenAI. It uses Siri to convince iPhone users that they need the Watch and Vision Pro.

Steve Jobs made Apple a technology leader. But Tim Cook did much more to cement Apple’s leading position in society and reward shareholders for it. He may be the biggest business legend.

At the time of writing, Dana Blankenhorn held a LONG position at NVDA, MSFT, and AAPL. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s Editorial Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available from the Amazon Kindle store. Email him at [email protected], tweet at @danablankenhorn, or sign up for his free Substack newsletter.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available from the Amazon Kindle store. Tweet him at @danablankenhorn, connect with him on Mastodon, or subscribe to his Substack.