> But with AI, quality/performance is the priority. That’s why we see so many new AI startups and use cases lighting up as AI improves and finally becomes ‘good enough’ for new use cases.
But also, we are seeing models leapfrog each other; the best model this week is often not the best model next month and certainly not next quarter. I still see merit to the idea that cloud providers should focus on being the place where companies put their data, and make it easy for companies to bring models and tools to that data.
I agree with the article that Apple is probably cooked if the continue their current path for another couple of years.
> Why couldn’t my watch and glasses be everything I need?
People like screens. They like seeing IG pictures,they like scrolling through TikTok, they like seeing pictures/videos their friends/family send/post. I doubt many people will want to see pictures/videos on a watch screen or in glasses (which still have a ways to go).
Also I don't buy the premise of this article that Apple is deciding to take a backseat in AI, they were late to the party but they are trying (and failing it seems) to build foundational models. Reaching for OpenAI/Anthropic/etc while they continue to work on their internal models makes a lot of sense to me. It acknowledges they are behind and need to rely on a third-party but doesn't mean they won't ever use their own models.
Unless something changes (which is absolutely possible) it does seem we are headed towards LLMs being comedities. We will see what OpenAI/Ive end up releasing but I don't see a near-future where we don't have screens in our pockets and for that Google and Apple are best placed. With the GPT-5 flop (It's 4.6 at best IMHO) I have less concerns with LLMs growing as quickly as predicted.
AI will become a commodity -- see Deepseek. The handwriting is on the wall and the open source models and practices to get to Claude 4.1 or GPT-5 are all in the public domain.
Apple could simply sell earpods with an AI voice interface, the UI/UX and solution space is evolving too quickly for a company like Apple to sensibly try to define how it will use the technology yet.
See Google and Microsoft's failed integrations of AI with search for an example of how it should not be done.
The more I use AI the more I think I don't need a laptop and would settle for a comfortable VR setup as I do far less typing of symbols.
Apple does not need to develop AI software itself in order to remain successful.
We more and more turn into cyborgs, wearing all kinds of processors and sensors on our bodies. And we need this hardware and the software that runs on it to be trustworthy.
Being the hardware producer and gatekeeper for trustworthy software to run on it is probably big enough of a market for Apple.
Even more so if their business of getting 15% to 30% of the revenue apps generate on the iPhone continues.
It has yet to be seen what type of company becomes most valuable in the AI stack. It could very well be that it does not operate LLMs. Similar to how the most valuable company in the hospitality industry does not operate hotels. It just operates a website on which you book hotels.
> But now there’s a new paradigm shift. The iPhone was perfect for the mobile era, which is why it hasn’t changed much over the last decade.
> AI unlocks what seems to be the future: dynamic, context-dependent generative UIs or something similar. Why couldn’t my watch and glasses be everything I need?
> The other problem is that at its core, AI is two things: 1) software and 2) extremely fast-moving/evolving, two things Apple is bad at.
Idk my MacBook Pro is pretty great and runs well. Fast moving here implies that as soon as you release something there's like this big paradigm shift or change that means you need to move even faster to catch up, but I don't think that's the case, and where it is the case the new software (LLM) still need to be distributed to end users and devices so for a company like Apple they pay money and build functionality to be the distributor of the latest models and it doesn't really matter how fast they're created. Apple's real threat is a category shift in devices, which AI may or may not necessarily be part of.
I'm less certain about Amazon but unless (insert AI company) wants to take on all the business risk of hosting governments and corporations and hospitals on a cloud platform I think Amazon can just publish their own models, buy someone else's, or integrate with multiple leading AI model publishers.
>I'm less certain about Amazon but unless (insert AI company) wants to take on all the business risk of hosting governments and corporations and hospitals on a cloud platform I think Amazon can just publish their own models, buy someone else's, or integrate with multiple leading AI model publishers.
Amazon is capturing massive amounts of the value in AI via AWS. They'll be fine. But for real I don't see a reason why Alexa is not using a good LLM now. Could just be infinitely better...
> I think Amazon can just publish their own models, buy someone else's, or integrate with multiple leading AI model publishers.
This is exactly what they've done: They offer SageMaker (and similar capabilities) for hosting smaller models that fit into a single instance GPU, and they have Bedrock that hosts a metric crap-ton of AWS and third party models. Many of the model architectures are supported for hosting fine-tuned versions.
I think the bet here is that AI is like Dropbox — a feature. Operating globally, these models are going to be a regulatory tar pit. The industry hype train is 100% reliant on courts ignoring the law - that didn’t work out well for Napster.
That makes the “category shift” difficult for Apple to execute well and difficult for competitors to gun for them. Microsoft is even worse off there because the PC OEMs relied on dying companies like Intel to deliver engineering for innovative things.
AWS, Azure, and GCP are doing the same stuff in different flavors. Google and Microsoft approach human facing stuff differently because they own collaboration platforms.
Apple and Microsoft are both flailing at the device level. Apple is ahead there as at least I can tell you what they are not doing well. Microsoft’s approach is so incoherent that it struggles to tell you what they are doing, period.
Came here to say pretty much this. Hardware seems more valuable than a model.
I think AI could be commoditized. Look at DeepSeek stealing OpenAI's model. Look at the competitive performance between Claude, ChatGPT, Grok, and Gemini. Look at open weight models, like Llama.
Commoditized AI need used via a device. The post argues that other devices, like watches or smart glasses, could be better posed to use AI. But...your point stands. Given Apple's success with hardware, I wouldn't bet against them making competitive wearables.
Hardware is hard. It's expensive to get wrong. It seems like a hardware company would be better positioned to build hardware than an AI company. Especially when you can steal the AI company's model.
Supply chains, battery optimization, etc. are all hard-won battles. But AI companies have had their models stolen in months.
If OpenAI really believed models would remain differentiated then why venture into hardware at all?
(I am mostly going to comment on the Watch issue, as I have one.)
Apple makes a watch, yes. But is it an AI watch? Will they manage to make it become one? Intel made all kinds of chips. Intel's chips even could be used for mobile devices... only, Intel never (even still, to today) made a great mobile chip.
I have an Apple Watch--and AirPods Pro, which connect directly to it--with a cellular plan. I already found how few things I can do with my Watch kind of pathetic, given that I would think the vast majority of the things I want to do could be done with a device like my watch; but, in a world with AI, where voice mode finally becomes compelling enough to be willing to use, it just feels insane.
I mean, I can't even get access to YouTube Music on just my watch. I can use Apple's Music--so you know this hardware is capable of doing it--but a lot of the content I listen to (which isn't even always "Music": you can also access podcasts) is on YouTube. Somehow, the Apple Watch version of YouTube access requires me to have my phone nearby?! I can't imagine Google wanted that: I think that's a limitation of the application model (which is notoriously limited). If I could access YouTube Music on my watch, I would've barely ever needed my iPhone around.
But like, now, I spend a lot of time using ChatGPT, and I really like its advanced voice mode... it is a new reason to use my iPhone, but is a feature that would clearly be amazing with just the watch: hell... I can even use it to browse the web? With a tiny bit of work, I could have a voice interface for everything I do (aka, the dream of Siri long gone past).
But, I can't even access the thing that already works great, today, with just my watch. What's the deal? Is it that OpenAI really doesn't want me to do that? These two companies have a partnership over a bunch of things--my ChatGPT account credentials are even something embedded into my iPhone settings--so I'd think Apple would be hungry for this to happen, and should've asked them, thrown it in as a term, or even done the work of integrating it for them (as they have in the past for Google's services).
This feels to me like Apple has a way they intend me to use the watch, and "you don't need to ever have your phone with you" is not something they want to achieve: if they add functionality that allows the Watch to replace an iPhone, they might lose some usage of iPhones, and that probably sounds terrifying (in the same way they seem adamant that an iPad can't ever truly compete with a MacBook, even if it is only like two trivial features away).
I think you're getting confused here with app limitations vs platform limitations. YouTube Music not streaming without the paired phone on the same wifi is an app limitation: other music apps like Spotify work without it. Lacking a watch app (or having a bad watch app) probably never lost any non fitness company any customers. A good iPhone app is much more make or break.
Just so you know, if you’re on your watch and you need ChatGPT, you can always just call 1-800 ChatGPT from your watch. I do it all the time and it’s fantastic.
For some time I have a feeling that Apple actually IS playing the hardware game in the age of AI. Even though they are not actively innovating on the AI software or shipping products with AI, their hardware (especially the unified memory) is great for running large models locally.
You can't get a consumer-grade GPU with enough VRAM to run a large model, but you can do so with macbooks.
I wonder if doubling down on that and shipping devices that let you run third party AI models locally and privately will be their path.
If only they made their unified memory faster as that seems to be the biggest bottleneck regarding LLMs and their tk/s performance.
True, but Apple is a consumer hardware company, which requires billions of users at their scale.
We may care about running LLMs locally, but 99% of consumers don't. They want the easiest/cheapest path, which will always be the cloud models. Spending ~$6k (what my M4 Max cost) every N years since models/HW keep improving to be able to run a somewhat decent model locally just isn't a consumer thing. Nonviable for a consumer hardware business at Apple's scale.
This. If we plateau around current SOTA LLM performance and 192/386Gb of memory can run a competitive model, Apple computers could become the new iPhone. They have a unique and unmatched product because of their hardware investment.
Of course nobody knows how this will eventually play out. But people without inside information on what these big organizations have/possess, cannot make such predictions.
On a hypothetical 70b q4 model, the Ryzen AI Max+ 395 (128GB memory with 96GB allocated to iGPU) delivers ~2–5 tokens/sec, slightly trailing the M4 Max’s ~3–7 tokens/sec. The next generation for AMD I expect can easily catch up to or surpass the M4 Max.
A pair of MaxSun/Intel Arc B60 48GB GPUs (dual 24GB B580's on one card) for $1200 each also outperforms the M4 Max.
I'm somewhat bullish on Google as well, they have the opportunity if they can figure out the product (which they are bad at) and they have the edge in cloud with their models + TPUs.
But your comment about the phone could have been about horses, or the notepad or any other technology paradigm we were used to in the past. Maybe it'll take a decade for the 'perfect' AI form factor to emerge, but it's unlikely to remain unchanged.
The author makes no effort to explain why AI :isn’t: a commodity as Apple and Amazon says. I was looking forward to that. I think the article is weak for not defending its premise. Everything else is fluff.
I agree - and if the article is correct and Apple and Amazon are the losers, I fail to glean who the winners will be or how their business model will be different.
That's fair, but it wasn't the point of the article because it's messy. Many would argue that core LLMs are 'trending' toward commodity, and I'd agree.
But it's complicated because commodities don't carry brand weight, yet there's obviously a brand power law. I (like most other people) use ChatGPT. But for coding I use Claude and a bit of Gemini, etc. depending on the problem. If they were complete commodities, it wouldn't matter much what I used.
A part of the issue here is that while LLMs may be trending toward commodity, "AI" isn't. As more people use AI, they get locked into their habits, memory (customization), ecosystem, etc. And as AI improves if everything I do has less and less to do with the hardware and I care more about everything else, then the hardware (e.g. iPhone) becomes the commodity.
Similar with AWS if data/workflow/memory/lock-in becomes the moat I'll want everything where the rest of my infra is.
I think both realize that nobody wants to buy an Apple or Amazon car. They want a Mercedes that drives itself. Mercedes is going to release one and Tesla is going to go bankrupt because of their ongoing negligence and disregard for safety. There's going to be a tidal wave of civil litigation at some point in the next 10 years.
I think Apple will come out looking great because they are less likely to release things that suck. It seems smarter to hoard cash right now rather than spending it on hardware for an unproven workload.
Yep, Apple is great at this. There have been times when random Android phones were ahead feature wise, but this doesn’t cause Apple to lose its customer base, even when Apple releases the same feature 2–4 years later. The same thing happened with smartwatches, Apple entered that industry late, yet the Apple Watch now dominates the market against well established players
I'm not sure I follow: Both Apple and Amazon are working on AI as we speak. They're just not following the popular approach of releasing a chatbot in the wild.
Apple is focusing on a privacy-first approach with smaller models that run locally. Amazon is tying it's models to an AWS subscription and incentivizing use by offering discounts, making it cheaper to use their models over GPT, Opus, etc.
Apple will integrate AI in a not user facing fashion. They'll weave it underneath the OS and the ecosystem. Like how they locally update memories and do other stuff on-device.
What we gonna see from Apple, IMHO, is a horde of smaller models working on different tasks on the devices itself, plus heavier stuff is running on "personal cloud compute" instances.
We'll not see Apple AI besides a sticker, it'll just try to do its work at the background.
Oh, people balk at auto-word-complete in the latest macOS, but I find it very useful. Spending little time here and there and it counts.
This is mostly true. Sure apple can make great cpu, gpu and innovate on airpods etc. But they are literally so behind on AI. This time they can't make that innovation jump like they did with iphone because there is no Steve jobs as a tech leader.
Apple now only cares about reveneue and retirement of all those who made Iphone and Macs great. They are rich so they don't need to innovate big until they are like Intel now. But they try creating toys like Vison Pro, and self driving car that was coming for a decade. Just all for the fun of it.
Old company with old leader and 0 hunger for succees. Opposite of all big AI startups today.
I don’t think anybody other than Google and Apple have a chance to win AI and it’s because they are the only companys with both the user base and the capacity to design and produce hardware for models.
Facebook has a data advantage and a use base but at the end of the day they will always need to make Nvidia or a cloud provider rich to run/train their models.
Amazon is the only company I regularly use that has implemented AI as a front that users very often interact with, and it's not a total disaster. Their customer service AI (when you have an issue) actually works well, and in many cases I didn't need to escalate to a human to get something sorted. YMMV, of course, but I hate about 99.9999999% of those "AI" customer service crap usually, and the recent "smart" ones are somehow way worse than the tree based ones of old.
So what? Like there is no computing beyond gigantic screens held with both hands with weird look and 'features', or there will be no services to provide but AI?
Maybe they won't be so big in monetary value anymore? So what? There are endless states between huge and nothing, actually most organizations live there and most serve people well.
Apple has "missed" multiple trends according to bloggers, and a few years later they end up releasing something that reaches the top of the market. Remember that they weren't the first MP3 players, tablets, headphones, smartphones, or smart watches... they lagged in these markets for years and have been at the top of them for decades since.
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[ 5.9 ms ] story [ 786 ms ] threadBut also, we are seeing models leapfrog each other; the best model this week is often not the best model next month and certainly not next quarter. I still see merit to the idea that cloud providers should focus on being the place where companies put their data, and make it easy for companies to bring models and tools to that data.
I agree with the article that Apple is probably cooked if the continue their current path for another couple of years.
People like screens. They like seeing IG pictures,they like scrolling through TikTok, they like seeing pictures/videos their friends/family send/post. I doubt many people will want to see pictures/videos on a watch screen or in glasses (which still have a ways to go).
Also I don't buy the premise of this article that Apple is deciding to take a backseat in AI, they were late to the party but they are trying (and failing it seems) to build foundational models. Reaching for OpenAI/Anthropic/etc while they continue to work on their internal models makes a lot of sense to me. It acknowledges they are behind and need to rely on a third-party but doesn't mean they won't ever use their own models.
Unless something changes (which is absolutely possible) it does seem we are headed towards LLMs being comedities. We will see what OpenAI/Ive end up releasing but I don't see a near-future where we don't have screens in our pockets and for that Google and Apple are best placed. With the GPT-5 flop (It's 4.6 at best IMHO) I have less concerns with LLMs growing as quickly as predicted.
Apple could simply sell earpods with an AI voice interface, the UI/UX and solution space is evolving too quickly for a company like Apple to sensibly try to define how it will use the technology yet.
See Google and Microsoft's failed integrations of AI with search for an example of how it should not be done.
The more I use AI the more I think I don't need a laptop and would settle for a comfortable VR setup as I do far less typing of symbols.
We more and more turn into cyborgs, wearing all kinds of processors and sensors on our bodies. And we need this hardware and the software that runs on it to be trustworthy.
Being the hardware producer and gatekeeper for trustworthy software to run on it is probably big enough of a market for Apple.
Even more so if their business of getting 15% to 30% of the revenue apps generate on the iPhone continues.
It has yet to be seen what type of company becomes most valuable in the AI stack. It could very well be that it does not operate LLMs. Similar to how the most valuable company in the hospitality industry does not operate hotels. It just operates a website on which you book hotels.
> AI unlocks what seems to be the future: dynamic, context-dependent generative UIs or something similar. Why couldn’t my watch and glasses be everything I need?
> The other problem is that at its core, AI is two things: 1) software and 2) extremely fast-moving/evolving, two things Apple is bad at.Idk my MacBook Pro is pretty great and runs well. Fast moving here implies that as soon as you release something there's like this big paradigm shift or change that means you need to move even faster to catch up, but I don't think that's the case, and where it is the case the new software (LLM) still need to be distributed to end users and devices so for a company like Apple they pay money and build functionality to be the distributor of the latest models and it doesn't really matter how fast they're created. Apple's real threat is a category shift in devices, which AI may or may not necessarily be part of.
I'm less certain about Amazon but unless (insert AI company) wants to take on all the business risk of hosting governments and corporations and hospitals on a cloud platform I think Amazon can just publish their own models, buy someone else's, or integrate with multiple leading AI model publishers.
Amazon is capturing massive amounts of the value in AI via AWS. They'll be fine. But for real I don't see a reason why Alexa is not using a good LLM now. Could just be infinitely better...
This is exactly what they've done: They offer SageMaker (and similar capabilities) for hosting smaller models that fit into a single instance GPU, and they have Bedrock that hosts a metric crap-ton of AWS and third party models. Many of the model architectures are supported for hosting fine-tuned versions.
That makes the “category shift” difficult for Apple to execute well and difficult for competitors to gun for them. Microsoft is even worse off there because the PC OEMs relied on dying companies like Intel to deliver engineering for innovative things.
AWS, Azure, and GCP are doing the same stuff in different flavors. Google and Microsoft approach human facing stuff differently because they own collaboration platforms.
Apple and Microsoft are both flailing at the device level. Apple is ahead there as at least I can tell you what they are not doing well. Microsoft’s approach is so incoherent that it struggles to tell you what they are doing, period.
I think AI could be commoditized. Look at DeepSeek stealing OpenAI's model. Look at the competitive performance between Claude, ChatGPT, Grok, and Gemini. Look at open weight models, like Llama.
Commoditized AI need used via a device. The post argues that other devices, like watches or smart glasses, could be better posed to use AI. But...your point stands. Given Apple's success with hardware, I wouldn't bet against them making competitive wearables.
Hardware is hard. It's expensive to get wrong. It seems like a hardware company would be better positioned to build hardware than an AI company. Especially when you can steal the AI company's model.
Supply chains, battery optimization, etc. are all hard-won battles. But AI companies have had their models stolen in months.
If OpenAI really believed models would remain differentiated then why venture into hardware at all?
> https://www.apple.com/watch/
(I am mostly going to comment on the Watch issue, as I have one.)
Apple makes a watch, yes. But is it an AI watch? Will they manage to make it become one? Intel made all kinds of chips. Intel's chips even could be used for mobile devices... only, Intel never (even still, to today) made a great mobile chip.
I have an Apple Watch--and AirPods Pro, which connect directly to it--with a cellular plan. I already found how few things I can do with my Watch kind of pathetic, given that I would think the vast majority of the things I want to do could be done with a device like my watch; but, in a world with AI, where voice mode finally becomes compelling enough to be willing to use, it just feels insane.
I mean, I can't even get access to YouTube Music on just my watch. I can use Apple's Music--so you know this hardware is capable of doing it--but a lot of the content I listen to (which isn't even always "Music": you can also access podcasts) is on YouTube. Somehow, the Apple Watch version of YouTube access requires me to have my phone nearby?! I can't imagine Google wanted that: I think that's a limitation of the application model (which is notoriously limited). If I could access YouTube Music on my watch, I would've barely ever needed my iPhone around.
But like, now, I spend a lot of time using ChatGPT, and I really like its advanced voice mode... it is a new reason to use my iPhone, but is a feature that would clearly be amazing with just the watch: hell... I can even use it to browse the web? With a tiny bit of work, I could have a voice interface for everything I do (aka, the dream of Siri long gone past).
But, I can't even access the thing that already works great, today, with just my watch. What's the deal? Is it that OpenAI really doesn't want me to do that? These two companies have a partnership over a bunch of things--my ChatGPT account credentials are even something embedded into my iPhone settings--so I'd think Apple would be hungry for this to happen, and should've asked them, thrown it in as a term, or even done the work of integrating it for them (as they have in the past for Google's services).
This feels to me like Apple has a way they intend me to use the watch, and "you don't need to ever have your phone with you" is not something they want to achieve: if they add functionality that allows the Watch to replace an iPhone, they might lose some usage of iPhones, and that probably sounds terrifying (in the same way they seem adamant that an iPad can't ever truly compete with a MacBook, even if it is only like two trivial features away).
3) massive scam
You can't get a consumer-grade GPU with enough VRAM to run a large model, but you can do so with macbooks.
I wonder if doubling down on that and shipping devices that let you run third party AI models locally and privately will be their path.
If only they made their unified memory faster as that seems to be the biggest bottleneck regarding LLMs and their tk/s performance.
You can if you're willing to trust a modded GPU with leaked firmware from a Chinese backshop
We may care about running LLMs locally, but 99% of consumers don't. They want the easiest/cheapest path, which will always be the cloud models. Spending ~$6k (what my M4 Max cost) every N years since models/HW keep improving to be able to run a somewhat decent model locally just isn't a consumer thing. Nonviable for a consumer hardware business at Apple's scale.
Of course nobody knows how this will eventually play out. But people without inside information on what these big organizations have/possess, cannot make such predictions.
A pair of MaxSun/Intel Arc B60 48GB GPUs (dual 24GB B580's on one card) for $1200 each also outperforms the M4 Max.
The phone is where the data is and Ai will find its usefulness in that data (and interface).
But your comment about the phone could have been about horses, or the notepad or any other technology paradigm we were used to in the past. Maybe it'll take a decade for the 'perfect' AI form factor to emerge, but it's unlikely to remain unchanged.
But it's complicated because commodities don't carry brand weight, yet there's obviously a brand power law. I (like most other people) use ChatGPT. But for coding I use Claude and a bit of Gemini, etc. depending on the problem. If they were complete commodities, it wouldn't matter much what I used.
A part of the issue here is that while LLMs may be trending toward commodity, "AI" isn't. As more people use AI, they get locked into their habits, memory (customization), ecosystem, etc. And as AI improves if everything I do has less and less to do with the hardware and I care more about everything else, then the hardware (e.g. iPhone) becomes the commodity.
Similar with AWS if data/workflow/memory/lock-in becomes the moat I'll want everything where the rest of my infra is.
Apple is focusing on a privacy-first approach with smaller models that run locally. Amazon is tying it's models to an AWS subscription and incentivizing use by offering discounts, making it cheaper to use their models over GPT, Opus, etc.
What we gonna see from Apple, IMHO, is a horde of smaller models working on different tasks on the devices itself, plus heavier stuff is running on "personal cloud compute" instances.
We'll not see Apple AI besides a sticker, it'll just try to do its work at the background.
Oh, people balk at auto-word-complete in the latest macOS, but I find it very useful. Spending little time here and there and it counts.
Apple now only cares about reveneue and retirement of all those who made Iphone and Macs great. They are rich so they don't need to innovate big until they are like Intel now. But they try creating toys like Vison Pro, and self driving car that was coming for a decade. Just all for the fun of it.
Old company with old leader and 0 hunger for succees. Opposite of all big AI startups today.
What matters for the future is what killer apps can be built on this commodity (tokens)?
Right now we've got content/text generation and ... nothing else?
I don't think they are missing out on anything. Everyone wants products from Apple or Amazon, only some power users and managers want "AI".
Facebook has a data advantage and a use base but at the end of the day they will always need to make Nvidia or a cloud provider rich to run/train their models.
Maybe they won't be so big in monetary value anymore? So what? There are endless states between huge and nothing, actually most organizations live there and most serve people well.
I think they’ll be fine. Amazon is an investor in Anthropic and Apple has an agreement with OpenAi. I’d consider that as an inorganic growth.