Apple reportedly spending $1 billion a year on AI — here’s what it could bring your iPhone and more

Siri presenting 'Go ahead, I'm listening' in text on iPhone screen.
(Image credit: Shutterstock)

We've heard about Apple researching generative AI for some time, and now the company is reportedly on track to invest up to $1 billion a year in the tech in an effort to compete with the likes of Google and Microsoft.

The report comes courtesy of Bloomberg's Mark Gurman, who has a strong track record when it comes to accurately reporting what's going on inside Apple. In the October 22 edition of his Power On newsletter Gurman claims that the Cupertino-based company is on track to spend roughly $1 billion a year on generative AI research and development as it tries to field its own spin on Bing with ChatGPT, Google Bard and the many ChatGPT alternatives that keep cropping up.

This is a big deal because Google, Microsoft and other companies have also been spending billions as well. At the start of 2023 few of us had any idea what "generative AI" was or why you'd want to have a conversation with a search engine, but in February I attended a small Microsoft ChatGPT event where CEO Satya Nadella took the wraps off Bing with ChatGPT for the first time—and in the process kickstarted an arms race among tech titans looking to wow and attract users by building AI-like chatbots into everything.

But as Gurman points out, Apple has appeared to opt out of that race all year. We've heard only reports about the company's work on its ChatGPT competitor, colloquially dubbed AppleGPT

“There’s a lot of anxiety about this," a source trusted by Gurman told Bloomberg. "It’s considered a pretty big miss internally."

Apple Park campus

AI's all the rage inside Apple, reportedly. (Image credit: Shutterstock)

And while the AppleGPT AI chatbot may already be in use inside Apple we may not see it manifest in Apple products this year or next, industry analyst Ming-Chi Kuo (another person with a strong track record when it comes to prognosticating about Apple) is betting that AppleGPT probably isn't coming in 2024.

But if and when Apple does start integrating generative AI into its products and services, what could that mean for you? 

Possible applications of AI in Apple products

It's pretty easy to let your mind wander and start daydreaming about how a company that sells expensive computing products could work AI-like chatbots into every aspect of its business.

But Gurman has done us one better and actually did some digging into how Apple is spending its money and investing in AI for practical applications. He claims that Apple's senior execs in charge of AI, services and software engineering (John Giannandrea, Eddy Cue and Craig Federighi, respectively) are all working together to try and spend that reported $1 billion/year on integrating AI-like tricks into Apple's apps, operating systems (most notably iOS) and more.

Messages, Siri and iOS 

According to Gurman, Apple is working on integrating AI into iOS on multiple fronts and at a deep level. For example, he claims the company is trying to figure out how to apply AI to Messages and Siri so that both are better able to answer questions and auto-complete your sentences. 

Apple Music vs. Spotify

Apple could be chasing Spotify by trying to integrate AI-created playlists into Apple Music. (Image credit: Shutterstock)

Apple Music and other apps

Also, Apple's Eddy Cue is reportedly trying to find ways to integrate AI in as many Apple apps as possible. We're talking Apple Music (AI-generated playlists), Keynote and Pages (AI-generated notes and slide decks) and presumably lots more. 

Gurman also claims Apple is continuing to try and find ways to use its AI chatbot tech (reportedly referred to as "Ajax" internally) in the AppleCare program. That could mean AI-generated help scripts for employees, AI-assisted operations via internal apps and who knows what else.

Xcode 

Developers aren't being left out of Apple's AI plans, as the company is reportedly working on how to integrate AI-like assistants into Xcode. That could help them write code faster and more efficiently by, say, offering accurate auto-correct suggestions while they're coding. 

Competitors like Microsoft have already done this by integrating tech like ChatGPT into Github, though at this point, the tech is advancing so rapidly that we've already been able to access an AI tool that uses ChatGPT to build you apps and websites in thirty minutes or so by just using your text prompts. 

Outlook

We've been hearing about Apple working on generative AI tech internally all year, but Gurman's recent reporting helps us understand the scope and urgency of that work.

If what he claims is true, some of Apple's top brass have been told to build the best, most trustworthy generative AI tech possible and figure out how to work it into as many Apple products as they can. Given the widespread availability and quality of Apple tech, a broad rollout of AI into iOS, iPadOS and macOS could reshape the way a lot of us use technology.

But according to Gurman, it's that potential for huge impact that may have Apple a bit cautious to move forward with this tech. The company is already in the midst of rolling out the Apple Vision Pro (it's biggest new product launch in ages) early in 2024 for $3,499, which seems like a tough sell for a lot of people. Now we're hearing that even as the pressure ratchets up internally to deliver Apple-grade AI tech, some inside the company are concerned about the tech's viability and are still debating critical decisions like whether to do the generative AI computing work on device or in the cloud. 

If Apple offloads some generative AI work to the cloud, for example, you can expect it to be more powerful and more capable than if it was running only on your phone or tablet—but you may also sacrifice some of the data privacy that Apple's known for.

Whichever direction the company goes, it's a safe bet the results of all this work will have big implications for Apple users down the road.

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Alex Wawro

Alex Wawro is a lifelong tech and games enthusiast with more than a decade of experience covering both for outlets like Game Developer, Black Hat, and PC World magazine. A lifelong PC builder, he currently serves as a senior editor at Tom's Guide covering all things computing, from laptops and desktops to keyboards and mice.