Instead of an exclusive AI partner, Apple could offer a choice of AI agents (OpenAI, Anthropic, etc.) on setup, similar to the EU's browser choice screen. This would create a competitive marketplace for AI assistants on billions of devices, driving significant investment and innovation across the industry.
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Unlike competitors feeling pressure to build proprietary AI foundation models, Apple can simply partner with providers like Google. This reveals Apple's true moat isn't the model itself but its massive hardware distribution network, giving it leverage to integrate best-in-class AI without the high cost of in-house development.
Bill Gurley argues that a sophisticated defensive move for giants like Amazon or Apple would be to collaboratively support a powerful open-source AI model. This counterintuitive strategy prevents a single competitor (like Microsoft/OpenAI) from gaining an insurmountable proprietary advantage that threatens their core businesses.
Apple's seemingly slow AI progress is likely a strategic bet that today's powerful cloud-based models will become efficient enough to run locally on devices within 12 months. This would allow them to offer powerful AI with superior privacy, potentially leapfrogging competitors.
Apple isn't trying to build the next frontier AI model. Instead, their strategy is to become the primary distribution channel by compressing and running competitors' state-of-the-art models directly on devices. This play leverages their hardware ecosystem to offer superior privacy and performance.
By integrating Google's Gemini directly into Siri, Apple poses a significant threat to OpenAI. The move isn't primarily to sell more iPhones, but to commoditize the AI layer and siphon off daily queries from the ChatGPT app. This default, native integration could erode OpenAI's mobile user base without Apple needing to build its own model.
Apple is avoiding massive capital expenditure on building its own LLMs. By partnering with a leader like Google for the underlying tech (e.g., Gemini for Siri), Apple can focus on its core strength: productizing and integrating technology into a superior user experience, which may be the more profitable long-term play.
A conflict is brewing on consumer devices where OS-level AI (e.g., Apple Intelligence) directly competes with application-level AI (e.g., Gemini in Gmail). This forces users into a confusing choice for the same task, like rewriting text. The friction between these layers will necessitate a new paradigm for how AI features are integrated and presented to the end-user.
Similar to how mobile gave rise to the App Store, AI platforms like OpenAI and Perplexity will create their own ecosystems for discovering and using services. The next wave of winning startups will be those built to distribute through these new agent-based channels, while incumbents may be slow to adapt.
While critics say Apple "missed AI," its strategy of partnering with Google for Gemini is a masterstroke. Apple avoids billions in CapEx, sidesteps brand-damaging AI controversies, and maintains control over the lucrative user interface, positioning itself to win the "agent of commerce" war.
Apple's partnership with Google for Siri was less about Google's technological superiority and more a strategic move to avoid empowering OpenAI, which is increasingly becoming a direct competitor in consumer hardware like smart glasses and audio devices. Giving OpenAI access to Apple's ecosystem would train a future rival.
