Apple punted on AI this year. Next year will be critical

One of the biggest launches Apple’s The date is supposed to come next year, and it has nothing to do with hardware.

The company promised investors that it would launch the next generation of its artificial intelligence voice assistant Siri. The launch of a “more personal Siri” has a lot to do with the launch of a “more personal Siri” for Apple, which has so far been absent from the tech industry’s AI race, which began with OpenAI launching ChatGPT in late 2022.

Apple doesn’t usually make its product roadmap public, but when it comes to Siri, the iPhone maker has made an exception. The company was supposed to launch its new AI assistant in 2025. But in March, Apple delayed the upgrade to “next year” even after running ads for the feature.

As consumers become increasingly accustomed to having free-flowing conversations with ChatGPT, Anthropic’s Claude, and the like. Google’s Gemini chatbots are putting pressure on Apple to keep up.

CEO Tim Cook told investors in October Deepwater Asset Management’s Gene Munster said Apple is making good progress with Siri, which “meaningfully raises the bar for what to expect.”

“They basically said don’t bother us about AI this year, we’ll blow you away with what we’ll show next year,” Munster said.

Apple shares are up 12% so far in 2025, and most of those gains have occurred in recent months as the company’s iPhone 17 launch in September impressed investors. But Android maker Google is at the center of the AI ​​boom with its own models and tensor-processing AI chips, and its shares are up more than 60% this year.

By 2025, AI was everywhere in Silicon Valley except Cupertino.

OpenAI released Sora 2, a video creation app that briefly topped the Apple App Store charts. Anthropic has released several new Claude models. Amazon has renewed its Alexa AI assistant. Microsoft In November, it released software that allows companies to manage “AI agents,” a term for AI programs that can run independently for hours. Equal MetaFaced with its own evolving AI strategy, it has made moves to prepare for the launch of its next flagship model, codenamed Avocado, CNBC reported last week.

And earlier in the year, Nvidia Received the title of Apple’s most valuable technology company. This was driven by insatiable demand for Nvidia’s graphics processing units. During the year, the chipmaker began rolling out a type of AI computer called the Grace Blackwell NVL72, which packs 72 discrete AI GPUs and costs an estimated $3 million.

Meanwhile, Apple hasn’t made a major AI launch since 2024, when it announced Apple Intelligence. The software suite included image generators, text rewriters, the ability to summarize push notifications, and integration with ChatGPT.

But so far, consumer reaction to Apple Intelligence has been mixed.

While the company’s advanced AI-powered notification filtering and photo editing features were praised, other AI features encountered problems. For example, Apple briefly turned off an AI feature that incorrectly rewrote push notifications from news apps (it has since been turned back on by default).

The most notable of the Apple Intelligence features were upgrades to Siri, but they were delayed in the spring because the company said development would take longer than first thought. Greg Joswiak, Apple’s worldwide marketing chief, said in June: report He told The Wall Street Journal that the company “doesn’t want to disappoint customers.”

Artificial intelligence was barely mentioned at the company’s Worldwide Developers Conference in June.

Apple said its new chips have better AI performance and introduced a number of machine learning features such as AirPod live translations and smart call screening. Developers were also invited to leverage Apple’s core models. But the company hasn’t announced anything on the scale of the chatbots and generative AI products its peers are launching.

As we closed out the year, Apple moved up its AI leadership rankings, signaling where the company stands when it comes to executing a strategy to keep pace with its rivals’ breakthrough technology.

Apple in early December in question John Giannandrea, the company’s machine learning and artificial intelligence strategy chief, will retire in 2026. Most of his responsibilities will be split between chief operations officer Sabih Khan, services chief Eddy Cue and new hire Amar Subramanya, who previously worked at Google and Microsoft. Apple said software chief Craig Federighi also gained greater control over artificial intelligence with Subramanya reporting to him.

Particularly noteworthy is the hiring of Subramanya, who was head of engineering at Google Gemini before briefly joining Microsoft as an AI executive. The iPhone maker doesn’t tend to publicly discuss engineering talent, especially new hires who don’t report directly to Cook.

The public announcement of the hiring of a vice president like Subramanya shows how important it is for Apple to prove to investors and the public that it is willing to shake up its AI leadership.

It turns out that Apple is playing a different game from its peers, taking a cloud-based AI approach that requires heavy spending on infrastructure.

Google, Microsoft, Meta and Amazon devoted $380 billion, the bulk of it, to capital expenditures this year In Nvidia-based data centers to build and deliver the most advanced AI models.

Apple also increased capital spending, but on a much smaller scale. Apple spent $12.71 billion on capital expenditures in the year ending September, up 35% year over year; but it’s less than what the company spent in 2018. The iPhone maker says that instead of using Nvidia chips in Apple Intelligence servers, it uses chips it originally designed for its computers for user privacy reasons.

The big question for Apple is whether it will look for a partner to power the new Siri.

Improvements to the upgraded Siri are also expected to include the voice assistant’s ability to intelligently do things like make reservations based on the user’s travel plans and personal relationships.

Currently, when Siri encounters complex queries, the AI ​​offers ChatGPT to answer the question. Company executives at a panel held shortly after the launch of Apple Intelligence last year in question There was a chance other base models could be included in the service, including Google’s Gemini. The latest version of Google’s model Gemini 3 was released in November to positive reviews.

Cook also said Apple is open to major acquisitions, which have been rare to date. Valuations of AI labs like OpenAI and Anthropic have reached levels that make them nearly impossible to acquire, even for a company with Apple’s cash flow.

OpenAI reached a $500 billion valuation in a share sale in October, and Anthropic was valued at $350 billion in November. By comparison, Apple’s biggest acquisition of all time occurred in 2014. Acquisition of Beats Electronics 3 billion dollars.

Apple’s lack of spending has caused some investors to worry about the company’s AI strategy, which has put more pressure on its Siri upgrade.

“Investors are already gray enough waiting for Apple to unveil its AI strategy,” said Wedbush analyst Dan Ives. “Now it’s time to come out and show the world what the strategy is.”

Analysts and consumers may not see the threat to Apple, but company executives do. Testifying at a hearing in May, Apple’s Cue said artificial intelligence technology move fast enough that users may not need an iPhone in a decade.

This is because new hardware devices can use AI to create new user interfaces and features that are not possible on smartphones. Some first AI devices have already hit the market.

Ray-Ban Meta glasses can use artificial intelligence to identify objects in the wearer’s field of vision, and Meta this month announced the acquisition of a startup called Limitless. This company’s artificial intelligence necklace can record conversations and create summaries for them. The purchase price was not disclosed.

But the biggest threat to Apple may come from its current AI partner.

Earlier this year, OpenAI acquired io, the AI ​​devices startup from former Apple design guru Jony Ive, for $6.4 billion, and now Ive is helping the AI ​​lab build the next generation of consumer devices. Ive, who left Apple in 2019, is still seen as one of the driving forces behind the hardware maker’s biggest hits, including the iPhone and iPad.

OpenAI CEO Sam Altman said in November that the company had “finally” completed its first device prototypes. Neither he nor I said what the devices were, only that they aimed for a calmer “vibe” than a smartphone with their hardware.

Earlier this month, Altman told reporters that he believed OpenAI’s real competitor was Apple, not Google. Smartphones aren’t well-suited for AI assistants or other use cases, he said. According to the Wall Street Journal.

But Apple still has time to prepare its meter. Back in November, I said it would take about two years for OpenAI devices to be released to the public.

“They have more time to figure this out than people think,” Munster said. “But in the near term, when the new Siri comes out, they should give it a 10 out of 10.”