Apple’s Generative AI Ambitions Face Challenges Amidst Competition from Meta and Microsoft
Apple is facing challenges in its generative AI ambitions as it strives to catch up with industry rivals like Meta Platforms and Microsoft. Analyst Ming-Chi Kuo has raised concerns about the required multi-billion-dollar investment for Apple to stay competitive in the field.
According to Kuo’s latest predictions, Apple plans to acquire 2,000 to 3,000 AI servers in 2023 and a more substantial 18,000 to 20,000 units in 2024. However, this investment only represents a small percentage of global AI server shipments when compared to competitors like Meta, which aims to purchase about 40,000 AI servers next year.
One of the challenges Apple is facing is the limited availability of NVIDIA Corporation’s AI chips. As a result, Apple is buying fewer AI servers this year and ordered them later than other major customers. While the supply chain situation is expected to improve in 2024, Apple will still lag significantly behind its competitors in terms of AI server count.
Despite this setback, Kuo believes that Apple can leverage its software expertise to make strides in the generative AI field. He suggests that although Apple’s AI infrastructure computing power may be less than its rivals, the company’s software capabilities can help bridge the gap. However, Kuo emphasizes that Apple would need to invest several billion US dollars annually to have a chance of catching up with its competitors.
There are concerns about the future of Apple’s generative AI business if the company chooses to allocate only a fraction of the required amount. With a budget of just one billion dollars a year, Apple may struggle to keep pace with its competitors. Analysts are genuinely concerned about the future of Apple’s generative AI business and its ability to provide competitive AI products and services.
Apple is said to be investing more than $1 billion each year to develop products and features based on generative AI. However, so far, the company has only introduced one significant AI-related update—an enhanced auto-correct feature in iOS 17. While rumors suggest that Apple is working on its ChatGPT rival called Apple GPT, no substantial consumer-facing AI products or services have been released yet.
In conclusion, Apple’s generative AI ambitions face challenges as the company strives to catch up with competitors like Meta and Microsoft. The required multi-billion-dollar investment is a cause for concern, and Apple needs to invest significantly more to have a chance of closing the gap. With growing competition in the AI market, it remains to be seen how Apple will progress in its generative AI endeavors.
