Jay Allred

Last year we surveyed our readers. Over 4,000 responded. The question I cared most about was how much readers trusted what they read on the Source. The response was gratifying. 95% of readers trust our reporting. 1/

First of all, I think this announcement is much ado about nothing. Who cares what Apple does besides AI nerds? Between my travels and work, I meet a lot of people. I’ve never once said “I work in AI” and then the other person said “I wish Siri were smarter.” In fact, most people say “Oh cool” and then start talking about literally anything else. Nobody cares. Second of all, I think this is a completely realistic business decision. Apple has made clear that they aren’t investing $10B+ in NVIDIA GPUs (notice no press releases about GPU purchases?) and they’re shipping Apple Intelligence with a ChatGPT integration instead of rushing an LLM to market. Apple is, instead, taking the long-term view, which, probably (although I haven’t talked to anyone at Apple), something like the following: 1. All these model providers are spending billions on GPUs and getting commoditized. The AI is getting cheaper daily. 2. There’s very little actual money to be made in owning an LLM. 3. There is a ton of money to be made in owning the distribution of the LLM (the destination where people actually use the LLM). Point 3 is most important. There’s a reason why DeepSeek came and went and everyone went back to their lives using ChatGPT. Even Gemini and Claude have nowhere near the marketshare of ChatGPT. If my research is correct, ChatGPT has a whopping 59.5% marketshare. LLMs are a game where distribution is absolutely everything. Let’s run this back to search engines. Apple made a sweet deal with Google which nets them a cool $20B per year to be the default search engine on iOS. Let me repeat that: Google pays Apple $20B per year (virtually all profit) to be the default search engine in iOS. A few weeks ago, Sundar Pichai announced that Google is monetizing AI-generated answers as well as their 10 blue links. If I’m Apple, I’d sign that exact same deal with Google for LLM-generated answers. Get that sweet, sweet ad revenue in there and keep the gravy train going. I think it’s time we be real about what the “AI Wars” really are: spending a ton of money on GPUs with no clear definition (plus a moving goalpost) of AGI. So, instead of worrying about Apple being “behind,” I recommend updating your iPhone to the latest version (for the security updates) and going back to work.