Apple’s new Vision Pro virtual reality headset is displayed during Apple’s Worldwide Developers Conference (WWDC) at the Apple Park campus in Cupertino, California, on June 5, 2023.
Josh Edelson | Afp | Getty Images
For years, Apple avoided using the acronym AI when talking about its products. Not anymore.
The boom in generative artificial intelligence, spawned in late 2022 by OpenAI, has been the biggest story in the tech industry of late, lifting chipmaker Nvidia to a $3 trillion market cap and causing a major shifting of priorities at Microsoft, Google and Amazon, which are all racing to add the technology into their core services.
Investors and customers now want to see what the iPhone maker has in store.
New AI features are coming at Apple’s Worldwide Developers Conference (WWDC), which takes place on Monday at Apple’s campus in Cupertino, California. Apple CEO Tim Cook has teased “big plans,” a change of approach for a company that doesn’t like to talk about products before they’re released.
WWDC isn’t typically a major investor attraction. On the first day, the company announces annual updates to its iOS, iPadOS, WatchOS and MacOS software in what’s usually a two-hour videotaped keynote launch event emceed by Cook. This year, the presentation will be screened at Apple’s headquarters. App developers then get a week of parties and virtual workshops where they learn about the new Apple software.
Apple fans get a preview of the software coming to iPhones. Developers can get to work updating their apps. New hardware products, if they appear at all, are not the showcase.
But this year, everyone will be listening for the most hyped acronym in tech.
With more than 1 billion iPhones in use, Wall Street wants to hear what AI features are going to make the iPhone more competitive against Android rivals and how the company can justify its investment in developing its own chips.
Investors have rewarded companies that show a clear AI strategy and vision. Nvidia, the primary maker of AI processors, has seen its stock price triple in the past year. Microsoft, which is aggressively incorporating OpenAI into its products, is up 28% over the past year. Apple is only up 9% over that same period, and has seen the other two companies surpass it in market cap.
“This is the most important event for Cook and Cupertino in over a decade,” Dan Ives, an analyst at Wedbush, told CNBC. “The AI strategy is the missing piece in the growth puzzle for Apple and this event needs to be a showstopper and not a shrug-the-shoulders event.”
Taking the stage will be executives including software chief Craig Federighi, who will likely address the real life uses of Apple’s AI, whether it should be run locally or in massive cloud clusters and what should be built into the operating system versus distributed in an app.
Privacy is also a key issue, and attendees will likely want to know how Apple can deploy the data-hungry technology without compromising user privacy, a centerpiece of the company’s marketing for over half a decade.
“At WWDC, we expect Apple to unveil its long-term vision around its implementation of generative AI throughout its diverse ecosystem of personal devices,” wrote Gil Luria, an analyst at D.A. Davidson, in a note this week. “We believe that the impact of generative AI to Apple’s business is one of the most profound in all of technology, and unlike much of the innovation in AI that’s impacting the developer or enterprise, Apple has a clear opportunity to reach billions of consumer devices with generative AI functionality.”
Upgrading Siri
Last month, OpenAI revealed a voice mode for its AI software called ChatGPT-4o.
In a short demo, OpenAI researchers held an iPhone and spoke directly to the bot inside the ChatGPT app, which was able to do impressions, speak fluidly and even sing. The conversation was snappy, the bot gave advice and the voice sounded like a human. Further demos at the live event showed the bot singing, teaching trigonometry, translating and telling jokes.
Apple users and pundits immediately understood that OpenAI had demoed a preview of what Apple’s Siri could be in the future. Apple’s voice assistant debuted in 2011 and since has gained a reputation for not being useful. It’s rigid, only able to answer a small proportion of well-defined queries, partially because it’s based on older machine learning techniques.
Apple could team up with OpenAI to upgrade Siri next week. It’s been discussing licensing chatbot technology from other companies, too, including Google and Cohere, according to a report from The New York Times.
Apple declined to comment on an OpenAI partnership.
One possibility is that Apple’s new Siri won’t compete directly with fully featured chatbots, but will improve its current features, and toss off queries that can only be answered by a chatbot to a partner. It’s close to how Apple’s Spotlight search and Siri work now. Apple’s system tries to answer the question, but if it can’t, it turns to Google. That agreement is part of a deal worth $18 billion per year to Apple.
Apple might also shy away from a full-throated embrace of an OpenAI partnership or chatbot. One reason is that a malfunctioning chatbot could generate embarrassing headlines, and could undermine the company’s emphasis on user privacy and personal control of user data.
“Data security will be a key advantage for the company and we expect them to spend time talking about their privacy efforts during the WWDC as well,” Citi analyst Atif Malik said in a recent note.
OpenAI’s technology is based on web scraping, and ChatGPT user interactions are used to improve the model itself, a technique that could violate some of Apple’s privacy principles.
Large language models like OpenAI’s still have problems with inaccuracies or “hallucinations,” like when Google’s search AI said last month that President Barack Obama was the first Muslim president. OpenAI CEO Sam Altman recently found himself in the middle of a thorny societal debate about deepfakes and deception when he denied accusations from actress Scarlett Johansson that OpenAI’s voice mode had ripped off her voice. It’s the kind of conflict that Apple executives prefer to avoid.
Efficient vs. large
Apple senior vice president of software engineering Craig Federighi speaks before the start of the Apple Worldwide Developers Conference at its headquarters on June 05, 2023 in Cupertino, California. Apple CEO Tim Cook kicked off the annual WWDC23 developer conference.
Outside of Apple, AI has become reliant on big server farms using powerful Nvidia processors paired with terabytes of memory to crunch numbers.
Apple, by contrast, wants its AI features to run on iPhones, and iPads, and Macs, which operate on battery power. Cook has highlighted Apple’s own chips as superior for running AI models.
“We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era, including Apple’s unique combination of seamless hardware, software, and services integration, groundbreaking Apple Silicon with our industry-leading neural engines, and our unwavering focus on privacy,” Cook told investors in May on an earnings call.
Samik Chatterjee, an analyst at JPMorgan, wrote in a note this month that, “We expect Apple’s presentation at WWDC keynote to be focused on the features and the on-device capabilities as well as the GenAI models being run on-device to enable those features.”
In April, Apple published research about AI models it calls “efficient language models” that would be able to run on a phone. Microsoft is also publishing research on the same concept. One of Apple’s “OpenELM” models has 1.1 billion parameters, or weights — far smaller than OpenAI’s 2020 GPT-3 model which has 175 billion parameters, and smaller even than the 70 billion parameters in one version of Meta’s Llama, which is one of the most widely used language models.
In the paper, Apple’s researchers benchmarked the model on a MacBook Pro laptop running Apple’s M2 Max chip, showing that these efficient models don’t necessarily need to connect to the cloud. That can improve response speed, and provide a layer of privacy, because sensitive questions could be answered on the device itself, rather than being sent back to Apple servers.
Some of the features built into Apple’s software could include providing users a summary of their missed text messages, image generation for new emojis, code completing in the company’s development software Xcode, or drafting email responses, according to Bloomberg.
Apple could also decide to load up its M2 Ultra chips in its data centers to process AI queries that need more horsepower, Bloomberg reported.
Green bubbles and Vision Pro
A customer uses Apple’s Vision Pro headset at the Apple Fifth Avenue store in Manhattan in New York City, U.S., February 2, 2024.
Brendan McDermid | Reuters
WWDC won’t strictly be about AI.
The company has more than 2.2 billion devices in use, and customers want improved software and new apps.
One potential upgrade could be Apple’s adoption of RCS, an improvement to the older system of text messaging known as SMS. Apple’s messages app diverts texts between iPhones to its own iMessage system, which displays conversations as blue bubbles. When an iPhone texts an Android phone, the bubble is green. Many features such as typing notifications aren’t available.
Google led development of RCS, adding encryption and other features to text messaging. Late last year Apple confirmed that it would add support for RCS alongside iMessage. The debut of iOS 18 would be the logical time to show its work.
The conference will also be the first anniversary of Apple’s reveal of the Vision Pro, its virtual and augmented reality headset, which was released in the U.S. in February. Apple could announce its expansion to more countries, including China and the U.K.
Apple said in its WWDC announcement that the Vision Pro would be in the spotlight. Vision Pro is currently on the first version of its operating system, and core features, such as its Persona videoconferencing simulation, are still in beta.
For users with a Vision Pro, Apple will offer some of its virtual sessions at the event in a 3D environment.
The Trump administration has floated a plan to trim about $6 billion from the budget of NASA, while allocating $1 billion of remaining funds to Mars-focused initiatives, aligning with an ambition long held by Elon Musk and his rocket maker SpaceX.
A copy of the discretionary budget posted to the NASA website on Friday said that the change focuses NASA’s funding on “beating China back to the Moon and on putting the first human on Mars.”
NASA also said it will need to “streamline” its workforce, information technology services, NASA Center operations, facility maintenance, and construction and environmental compliance activities, and terminate multiple “unaffordable” missions, while reducing scientific missions for the sake of “fiscal responsibility.”
Janet Petro, NASA’s acting administrator, said in an agency-wide email on Friday that the proposed lean budget, which would cut about 25% of the space agency’s funding, “reflects the administration’s support for our mission and sets the stage for our next great achievements.”
Petro urged NASA employees to “persevere, stay resilient, and lean into the discipline it takes to do things that have never been done before — especially in a constrained environment,” according to the memo, which was obtained by CNBC. She acknowledged the budget would “require tough choices,” and that some of NASA’s “activities will wind down.”
The document on NASA’s website said it’s allocating more than $7 billion for moon exploration and “introducing $1 billion in new investments for Mars-focused programs.”
SpaceX, which is already among the largest NASA and Department of Defense contractors, has long sought to launch a manned mission to Mars. The company says on its website that its massive Starship rocket is designed to “carry both crew and cargo to Earth orbit, the Moon, Mars and beyond.”
Musk, who is the founder and CEO of SpaceX, has a central role in President Donald Trump’s administration, leading an effort to slash the size, spending and capacity of the federal government, and influencing regulatory changes through the Department of Government Efficiency (DOGE).
Musk, who frequently makes aggressive and incorrect projections for his companies, said in 2020 that he was “highly confident” that SpaceX would land humans on Mars by 2026.
Petro highlighted in her memo that under the discretionary budget, NASA would retire the SLS (Space Launch System) rocket, the Orion spacecraft and Gateway programs.
It would also put an end to its green aviation spending and to its Mars Sample Return (MSR) Program, which sought to use rockets and robotic systems to “collect and send samples of Martian rocks, soils and atmosphere back to Earth for detailed chemical and physical analysis,” according to a website for NASA’s Jet Propulsion Laboratory.
Some of the biggest reductions at NASA, should the budget get approved, would hit the space agency’s space science, Earth science and mission support divisions.
Petro didn’t name any specific aerospace and defense contractors in her agency-wide email. However SpaceX, ULA and Jeff Bezos’ Blue Origin are positioned to continue to conduct launches in the absence of the SLS. Boeing is currently the prime contractor leading the SLS program.
“This is far from the first time NASA has been asked to adapt, and your ability to deliver, even under pressure, is what sets NASA apart,” she wrote.
President Trump’s nominee to lead NASA, tech entrepreneur Jared Isaacman, still has to be approved by the U.S. Senate. His nomination was advanced out of the Senate Commerce Committee on Wednesday.
Chinese bargain retailer Temu changed its business model in the U.S. as the Trump administration’s new rules on low-value shipments took effect Friday.
In recent days, Temu has abruptly shifted its website and app to only display listings for products shipped from U.S.-based warehouses. Items shipped directly from China, which previously blanketed the site, are now labeled as out of stock.
Temu made a name for itself in the U.S. as a destination for ultra-discounted items shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s been able to keep prices low because of the so-called de minimis rule, which has allowed items worth $800 or less to enter the country duty-free since 2016.
The loophole expired Friday at 12:01 a.m. EDT as a result of an executive order signed by President Donald Trump in April. Trump briefly suspended the de minimis rule in February before reinstating the provision days later as customs officials struggled to process and collect tariffs on a mountain of low-value packages.
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The end of de minimis, as well as Trump’s new 145% tariffs on China, has forced Temu to raise prices, suspend its aggressive online advertising push and now alter the selection of goods available to American shoppers to circumvent higher levies.
A Temu spokesperson confirmed to CNBC that all sales in the U.S. are now handled by local sellers and said they are fulfilled “from within the country.” Temu said pricing for U.S. shoppers “remains unchanged.”
“Temu has been actively recruiting U.S. sellers to join the platform,” the spokesperson said. “The move is designed to help local merchants reach more customers and grow their businesses.”
Before the change, shoppers who attempted to purchase Temu products shipped from China were confronted with “import charges” of between 130% and 150%. The fees often cost more than the individual item and more than doubled the price of many orders.
Temu advertises that local products have “no import charges” and “no extra charges upon delivery.”
The company, which is owned by Chinese e-commerce giant PDD Holdings, has gradually built up its inventory in the U.S. over the past year in anticipation of escalating trade tensions and the removal of de minimis.
Shein, which has also benefited from the loophole, moved to raise prices last week. The fast-fashion retailer added a banner at checkout that says, “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.”
Many third-party sellers on Amazon rely on Chinese manufacturers to source or assemble their products. The company’s Temu competitor, called Amazon Haul, has relied on de minimis to ship products priced at $20 or less directly from China to the U.S.
Amazon said Tuesday following a dustup with the White House that had it considered showing tariff-related costs on Haul products ahead of the de minimis cutoff but that it has since scrapped those plans.
Prior to Trump’s second term in office, the Biden administration had also looked to curtail the provision. Critics of the de minimis provision argue that it harms American businesses and that it facilitates shipments of fentanyl and other illicit substances because, they say, the packages are less likely to be inspected by customs agents.
Jeff Bezos, founder and executive chairman of Amazon and owner of The Washington Post, takes the stage during The New York Times’ annual DealBook Summit, at Jazz at Lincoln Center in New York City, Dec. 4, 2024.
Michael M. Santiago | Getty Images
Amazon founder Jeff Bezos plans to sell up to 25 million shares in the company over the next year, according to a financial filing on Friday.
Bezos, who stepped down as CEO in 2021 but remains Amazon’s top shareholder, is selling the shares as part of a trading plan adopted on March 4, the filing states. The stake would be worth about $4.8 billion at the current price.
The disclosure follows Amazon’s first-quarter earnings report late Thursday. While profit and revenue topped estimates, the company’s forecast for operating income in the current quarter came in below Wall Street’s expectations.
The results show that Amazon is bracing for uncertainty related to President Donald Trump’s sweeping new tariffs. The company landed in the crosshairs of the White House this week over a report that Amazon planned to show shoppers the cost of the tariffs. Trump personally called Bezos to complain, and Amazon clarified that no such change was coming.
Bezos previously offloaded about $13.5 billion worth of Amazon shares last year, marking his first sale of company stock since 2021.
Since handing over the Amazon CEO role to Andy Jassy, Bezos has spent more of his time on his space exploration company, Blue Origin, and his $10 billion climate and biodiversity fund. He’s used Amazon share sales to help fund Blue Origin, as well as the Day One Fund, which he launched in September 2018 to provide education in low-income communities and combat homelessness.