Apple CEO Tim Cook (L); John Giannandrea (C), senior vice president of machine learning and AI strategy; and Craig Federighi (R), senior vice president of software engineering, speak during Apple’s annual Worldwide Developers Conference in Cupertino, California, on June 10, 2024.
Nic Coury | AFP | Getty Images
Apple fully embraced artificial intelligence on Monday, as company executives explained the features and reasoning behind Apple Intelligence, the company’s new AI software suite.
But Apple’s Worldwide Developers Conference launch event was carefully crafted to distinguish the iPhone maker from current AI leaders, such as Microsoft and Google, at a panel discussion Monday afternoon.
Software chief Craig Federighi and AI chief John Giannandrea said during the panel that Apple has a different approach to the technology than its Silicon Valley rivals. Unlike companies that are building AI for a broad range of products, Apple is instead focused only on the devices it sells and the personal data that AI could use.
Apple revealed a more limited approach that eschews future-focused thinking about the potential of the technology in favor of small tasks that can be done now without burning up battery life.
“We think AI’s role is not to replace our users but to empower them,” Federighi said.
Apple’s AI may be the first that its over 2 billion users interact with. If its AI features are favored over cloud-based competition from Microsoft or Google, it could change how billions of dollars in AI infrastructure per year is built and shift the direction of products that use the technology.
Much of the AI development that has captured investor and technological interest has focused on building or securing powerful supercomputers equipped with Nvidia chips to develop even more power-hungry AI models. In this scenario, users access the AI software by communicating with equally powerful servers over the web.
Apple’s AI is mostly on your device
Apple Intelligence was unveiled during Apple’s Worldwide Developers Conference in Cupertino, California, on June 10, 2024.
Source: Apple Inc.
Apple’s vision for AI isn’t about one big model — it’s a slew of smaller models that don’t require the same amount of computing power and memory, running on Apple’s devices and chips themselves. If the AI on the phone can’t do it, then Apple, or an app using Apple’s tools, reaches out to the cloud to access a larger AI model. Apple partnered with OpenAI, for example, to give users access to ChatGPT if Siri can’t provide an answer. These features come into play only if users allow it.
Apple executives don’t refer to this strategy as using one or multiple models. Instead, they package it as just “Apple Intelligence.”
“We think that the right approach to this is to have a series of different models and different sizes for different use cases,” Giannandrea said.
Giannandrea said the company worked to create a 3-billion parameter model as part of Apple Intelligence. ChatGPT’s GPT-3 model from 2020, in comparison, is much larger, at 175 billion parameters. The more parameters, the more memory and computing power needed to run the model.
Apple’s approach is faster than the cloud-based options and has privacy benefits. However, there can be issues when the models are too small to get anything done. Apple is betting that through a user’s iPhone, its AI can tap into personal data about appointments, location, and what the user is doing. One example provided by Federighi is that his phone knows who his daughter is.
Apple also says it’s making sure its small models work only on tasks they can excel at, rather than give users an open-ended chatbot interface.
“There’s a critical extra step, which is we’re not taking this teenager and telling him to go fly an airplane,” Federighi said.
Many AI features Apple announced on Monday are similar to products already announced this year. Apple’s AI can summarize and rewrite documents, generate small images, and translate conversations in real time. One notable feature will enable users to generate new emojis using AI without connecting to the internet. The new features will be released this fall in a beta version.
Apple’s approach to privacy
Private Cloud Compute unveiled during Apple’s Worldwide Developers Conference in Cupertino, California, on June 10, 2024.
Source: Apple Inc.
Privacy will be a challenge for Apple as it embraces AI. It has used privacy as one of its primary marketing tools for years, highlighting that Apple’s business model doesn’t require ad targeting and that it has the best interests of its users in mind versus data brokers and spammers.
Other AI companies collect user data and store it to improve their software, a practice that doesn’t fit Apple’s current privacy policies. Much of Apple’s presentation on Monday pointed to steps the company has taken to prevent the impression that it’s hoovering up user data to improve its AI.
“We’re not going to take that data and go send it to some cloud somewhere,” Giannandrea said. “Because we want everything to be very private, whether it’s running locally or on a cloud computing service, and that’s the way we want it so we can use your most personal data.”
Apple didn’t detail what data was used to train its AI models, beyond that it uses files scraped from the public web in addition to licensed data, such as news archives and stock photography.
Apple said it developed its own servers using its Apple chips, called Apple Private Cloud, to prevent user data sent back to an AI server from being stored or re-used. It will allow third parties to inspect the software, a notable move for a secrecy-focused company that usually doesn’t provide information about its infrastructure.
“Even if a company maybe makes a promise and says, ‘Well, hey, look, we’re not going to do anything with the data.’ You have no way to verify that,” Federighi said, explaining why Apple will allow inspection of its AI server software.
More AI to come
ChatGPT integration with Apple iOS 18 announced during Apple’s Worldwide Developers Conference in Cupertino, California, on June 10, 2024.
Source: Apple Inc.
At times, Apple officials seemed to downplay how big a shift this is in the company’s AI strategy, saying that it’s a continuation of the machine learning work the company has already done to edit photos or transcribe text, or to put AI-specific blocks on its chips.
“It’s only recently that others are starting to suddenly claim like there’s some new category there,” Federighi said. “But those are things we’ve been shipping for a long time.”
However, Apple didn’t bet it all on a single approach. It will offer ChatGPT built into its operating systems, allowing users to prompt OpenAI’s model for free and offering users a more powerful and larger AI model. However, OpenAI’s ChatGPT will be marked in Apple’s software, telling users that data will be sent to OpenAI servers, which run on Microsoft’s cloud. Answers will indicate that they were generated by ChatGPT, too, just in case they go off the rails.
Apple said it could offer different models in the future, signaling that Apple Intelligence is not the only AI system it expects its customers to use. Federighi said that one day some of its customers might want a medical AI system or legal AI model built into Apple products, for example. Or maybe one of Google’s models.
“We’re going to look forward to doing integrations with models like Google Gemini, for instance, in the future. I mean, nothing to announce right now,” Federighi said. “But that’s our direction.”
Elon Musk listens as reporters ask U.S. President Donald Trump and South Africa President Cyril Ramaphosa questions during a press availability in the Oval Office at the White House on May 21, 2025 in Washington, DC.
Chip Somodevilla | Getty Images
Tesla shares gained about 5% on Tuesday after CEO Elon Musk over the weekend reiterated his intent to home in on his businesses ahead of the latest SpaceX rocket launch.
The billionaire wrote in a post to his social media platform X that he needs to be “super focused” on X, artificial intelligence company xAI and Tesla as they launch “critical technologies” on the heels of a temporary outage.
“As evidenced by the uptime issues this week, major operational improvements need to be made,” he wrote, adding that he would return to “spending 24/7” at work. “The failover redundancy should have worked, but did not.”
An outage over the weekend briefly shuttered the social media platform formerly known as Twitter for thousands of users, according to DownDetector. Earlier in the week, the platform suffered a data center outage. X has suffered a series of outages since Musk purchased the platform in 2022.
Read more CNBC tech news
Musk has previously indicated plans to step away from his political work and prioritize his businesses.
During Tesla’s April earnings call he said that he would “significantly” reduce his time running President Donald Trump‘s Department of Government Efficiency.
In the last election cycle, Musk devoted time and billions of dollars to political causes and toward electing Trump in 2024. However, a story over the weekend from the Washington Post, citing sources familiar with the matter, said that Musk has grown disillusioned with politics and wants to return to managing his businesses.
Last week, Musk said in an interview at the Qatar Economic Forum that he planned to spend “a lot less” on campaign donations going forward.
The comments from Musk precede SpaceX’s Starship rocket Tuesday evening. Pressure is on for the company after two Starship rockets exploded in January and March.
Ahead of the launch, Musk announced an all hands livestream on X at 1 p.m.
Tesla is still facing fallout from Musk’s political foray, with protests at showrooms and other brand damage.
In April, Tesla sold 7,261 cars in Europe, down 49% from last year, according to the European Automobile Manufacturers’ Association.
National Economic Council Director Kevin Hassett said Tuesday that the Trump administration does not want to “harm Apple” with tariffs.
“Everybody is trying to make it seem like it’s a catastrophe if there’s a tiny little tariff on them right now, to try to negotiate down the tariffs,” Hassett told CNBC’s “Squawk Box” on Tuesday. “In the end, we’ll see what happens, we’ll see what the update is, but we don’t want to harm Apple.”
Hassett’s comments come after President Donald Trump said in a social media post that Apple will have to pay a tariff of 25% or more for iPhones made outside the U.S. Apple has historically manufactured its products in foreign countries including China, India and Vietnam.
“I have long ago informed Tim Cook of Apple that I expect their iPhone’s that will be sold in the United States of America will be manufactured and built in the United States, not India, or anyplace else,” Trump wrote in the post. “If that is not the case, a Tariff of at least 25% must be paid by Apple to the U.S. Thank your for your attention to this matter!”
By some estimates, a U.S.-made iPhone could cost as much as $3,500.
Read more CNBC tech news
“If you think that Apple has a factory some place that’s got a set number of iPhones that it produces and it needs to sell them no matter what, then Apple will bear those tariffs, not consumers, because it’s an elastic supply,” Hassett said.
Hasset’s comments continue the administration’s push to pressure companies to shoulder the cost burden of Trump’s tariffs, instead of raising prices for consumers.
Earlier this month, Trump told retail giant Walmart to “EAT THE TARIFFS” after the company warned it would have to pass those added costs on.
Shares of Apple were up more than 1% Tuesday.
Apple did not immediately respond to CNBC’s request for comment.
Dr. Priti Patel, CMIO at John Muir Health, uses Ambience before starting a patient encounter.
Courtesy of Ambience Healthcare
Artificial intelligence startup Ambience Healthcare on Tuesday announced a new medical coding model that outperforms doctors by 27%.
Ambience uses AI to draft clinical notes in real-time as doctors consensually record their visits with patients. The company used tools from OpenAI to build the new model.
The startup is part of a fiercely competitive market that has taken off as health-care executives search for solutions to help reduce staff burnout and daunting administrative workloads.
The company’s new model can listen to patient encounters and identify ICD-10 codes, which are internationally standardized classifications for different diseases and conditions. There are about 70,000 ICD-10 codes that are regularly updated and used to facilitate billing and other reporting processes in health care.
Ambience said its new ICD-10 model can reduce billing mistakes and help clinicians and professional coders work more efficiently. The model notched a “27% relative improvement over physician benchmarks,” according to a release on Tuesday.
“We’re not replacing doctors or coders,” Brendan Fortuner, Ambience’s head of engineering, told CNBC in an interview.“What we’re doing is we’re liberating them from administration, and we’re fixing mistakes that help make health care better, safer, more cost-effective.”
More CNBC health coverage
Documenting ICD-10 codes has traditionally been a labor-intensive task in health care, but it’s a crucial way to track outcomes, mortalities and morbidities in a standardized way, said Dr. Will Morris, the chief medical officer of Ambience.
“If you think about it from a data perspective, it’s how you can compare and contrast clinician A to B, or health system A to B,” Morris said in an interview. “It’s the cornerstone for quality.”
Ambience’s technology is used at more than 40 health-care organizations, like Cleveland Clinic and UCSF Health. It has raised more than $100 million, according to PitchBook, from investors including Kleiner Perkins, Andreessen Horowitz and the OpenAI Startup Fund.
The company is reportedly seeking fresh capital at a valuation of over $1 billion, according to a report from The Information. Ambience declined to comment on the report.
Ambience trained its new AI model using OpenAI’s reinforcement fine-tuning technology. This technology allows companies to tune OpenAI’s best reasoning models for very specific domains, like health care.
To validate the model, Ambience tested it against a “gold panel” set of labels, the company said. The labels were established by a group of expert clinicians who evaluated complex clinical cases and came to an agreement on what the right codes were.
Ambience’s AI platform for compliant documentation, CDI, and coding.
Courtesy of Ambience Healthcare
The company then recruited 18 different board-certified doctors and compared their performance on ICD-10 coding accuracy to the model’s performance. That comparison showed the Ambience technology performed 27% better than the physician baseline.
“It shows for the first time that an AI system can actually surpass clinician experts at a very, very important administrative task, especially in coding,” Fortuner said.
Ambience already has similar capabilities available for other medical codes like Current Procedural Terminology (CPT) codes, and Fortuner said it’s exploring how to tackle other areas like prior authorizations, utilization management and clinical trial matching.
The company’s new ICD-10 model will roll out to customers over the summer.
“Getting it right at the point of care is a fundamental change,” Morris said.