Apple execs explain why its AI is different from competitors

Published

7 months ago

June 11, 2024

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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.”

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Technology

How VPNs might allow Americans to continue using TikTok

Published

3 hours ago

January 15, 2025

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How VPNs might allow Americans to continue using TikTok

Dado Ruvic | Reuters

If TikTok does indeed go dark on Sunday for Americans, there may be a tool for them to continue accessing the popular social app: VPNs.

The Chinese-owned app is set to be removed from mobile app stores and the web for U.S. users on Sunday as a result of a law signed by President Joe Biden in April 2024 requiring that the app be sold to a qualified buyer before the deadline.

Barring a last-minute sale or reprieve from the Supreme Court, the app will almost certainly vanish from the app stores for iPhones and Android phones. It won’t be removed from people’s phones, but the app could stop working.

TikTok plans to shut its service for Americans on Sunday, meaning that even those who already have the app downloaded won’t be able to continue using it, according to reports this week from Reuters and The Information. Apple and Google didn’t comment on their plans for taking down the apps from their app stores on Sunday.

“Basically, an app or a website can check where users came from,” said Justas Palekas, a head of product at IProyal.com, a proxy service. “Based on that, then they can impose restrictions based on their location.”

Masking your physical internet access point

That may stop most users, but for the particularly driven Americans, using VPNs might allow them to continue using the app.

VPNs and a related business-to-business technology called proxies work by tunneling a user’s internet traffic through a server in another country, making it look like they are accessing the internet from a location different than the one they are physically in.

This works because every time a computer connects to the internet, it is identified through an IP number, which is a 12-digit number that is different for every single computer. The first six digits of the number identifies the network, which also includes information about the physical region the request came from.

In China, people have used VPNs for years to get around the country’s firewall, which blocks U.S. websites such as Google and Facebook. VPNs saw big spikes in traffic when India banned TikTok in 2020, and people often use VPNs to watch sporting events from countries where official broadcasts aren’t available.

As of 2022, the VPN market was worth nearly $38 billion, according to the VPN Trust Initiative, a lobbying group.

“We consistently see significant spikes in VPN demand when access to online platforms is restricted, and this situation is no different,” said Lauren Hendry Parsons, privacy advocate at ExpressVPN, a VPN provider that costs $5 per month to use.

“We’re not here to endorse TikTok, but the looming U.S. ban highlights why VPNs matter— millions rely on them for secure, private, and unrestricted access to the internet,” ProtonVPN posted on social media earlier this week. ProtonVPN offers its service for $10 a month.

The price of VPNs

Both ExpressVPN and ProtonVPN allow users to set their internet-access location.

Most VPN services charge a monthly fee to pay for their servers and traffic, but some use a business model where they collect user data or traffic trends, such as when Meta offered a free VPN so it could keep an eye on which competitors’ apps were growing quickly.

A key tradeoff for those who use VPN is speed due to requests having to flow through a middleman computer to mask a users’ physical location.

And although VPNs have worked in the past when governments have banned apps, that doesn’t ensure that VPNs will work if TikTok goes dark. It won’t be clear if ExpressVPN would be able to access TikTok until after the ban takes place, Parsons told CNBC in an email. It’s also possible that TikTok may be able to determine Americans who try to use VPNs to access the app.

(L-R) Sarah Baus of Charleston, S.C., holds a sign that reads “Keep TikTok” as she and other content creators Sallye Miley of Jackson, Mississippi, and Callie Goodwin of Columbia, S.C., stand outside the U.S. Supreme Court Building as the court hears oral arguments on whether to overturn or delay a law that could lead to a ban of TikTok in the U.S., on January 10, 2025 in Washington, DC.

Andrew Harnik | Getty Images

VPNs and proxies to evade regional restrictions have been part of the internet’s landscape for decades, but their use is increasing as governments seek to ban certain services or apps.

Apps are removed by government request all the time. Nearly 1500 apps were removed in regions due to government takedown demands in 2023, according to Apple, with over 1,000 of them in China. Most of them are fringe apps that break laws such as those against gambling, or Chinese video game rules, but increasingly, countries are banning apps for national security or economic development reasons.

Now, the U.S. is poised to ban one of the most popular apps in the country — with 115 million users, it was the second most downloaded app of 2024 across both iOS and Android, according to an estimate provided to CNBC from Sensor Tower, a market intelligence firm.

“As we witness increasing attempts to fragment and censor the internet, the role of VPNs in upholding internet freedom is becoming increasingly critical,” Parsons said.

WATCH: Chinese TikTok alternative surges

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YouTube donating $15 million in LA wildfire relief, support for creators days before TikTok ban

Published

5 hours ago

January 15, 2025

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YouTube donating million in LA wildfire relief, support for creators days before TikTok ban

Charred remains of buildings are pictured following the Palisades Fire in the Pacific Palisades neighborhood in Los Angeles, California, U.S. Jan. 15, 2025.

Mike Blake | Reuters

Google and YouTube will donate $15 million to support the Los Angeles community and content creators impacted by wildfires, YouTube CEO Neal Mohan announced in a blog post Wednesday.

The contributions will flow to local relief organizations including Emergency Network Los Angeles, the American Red Cross, the Center for Disaster Philanthropy and the Institute for Nonprofit News, the blog said. When the company’s LA offices can safely reopen, impacted creators will also be able to use YouTube’s production facilities “to recover and rebuild their businesses” as well as access community events.

“To all of our employees, the YouTube creator community, and everyone in LA, please stay safe and know we’re here to support,” Google CEO Sundar Pichai posted on X.

The move comes days before Sunday’s impending TikTok ban that has already seen content creators begin asking fans to follow them on other social platforms. YouTube Shorts, a short-form video platform within YouTube, is a competitor to TikTok, along with Meta’s Instagram Reels and the fast-growing Chinese app Rednote, otherwise known as Xiahongshu.

TikTok’s U.S. operations could be worth as much as $50 billion if ByteDance decides to sell

Published

7 hours ago

January 15, 2025

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TikTok’s U.S. operations could be worth as much as billion if ByteDance decides to sell

Jakub Porzycki | Nurphoto | Getty Images

Business moguls such as Elon Musk should be prepared to spend tens of billions of dollars for TikTok’s U.S. operations should parent company ByteDance decide to sell.

TikTok is staring at a potential ban in the U.S. if the Supreme Court decides to uphold a national security law in which service providers such as Apple and Google would be penalized for hosting the app after the Sunday deadline. ByteDance has not indicated that it will sell the app’s U.S. unit, but the Chinese government has considered a plan in which X owner Musk would acquire the operations, as part of several scenarios in consideration, Bloomberg News reported Monday.

If ByteDance decides to sell, potential buyers may have to spend between $40 billion and $50 billion. That’s the valuation that CFRA Research Senior Vice President Angelo Zino has estimated for TikTok’s U.S. operations. Zino based his valuation on estimates of TikTok’s U.S. user base and revenue in comparison to rival apps.

TikTok has about 115 million monthly mobile users in the U.S., which is slightly behind Instagram’s 131 million, according to an estimate by market intelligence firm Sensor Tower. That puts TikTok ahead of Snapchat, Pinterest and Reddit, which have U.S. monthly mobile user bases of 96 million, 74 million and 32 million, according to Sensor Tower.

Zino’s estimate, however, is down from the more than $60 billion that he estimated for the unit in March 2024, when the House passed the initial national security bill that President Joe Biden signed into law the following month.

The lowered estimate is due to TikTok’s current geopolitical predicament and because “industry multiples have come in a bit” since March, Zino told CNBC in an email. Zino’s estimate doesn’t include TikTok’s valuable recommendation algorithms, which a U.S. acquirer would not obtain as part of a deal, with the algorithms and their alleged ties to China being central to the U.S. government’s case that TikTok poses a national security threat.

Analysts at Bloomberg Intelligence have their estimate for TikTok’s U.S. operations pegged in the range of $30 billion to $35 billion. That’s the estimate they published in July, saying at the time that the value of the unit would be “discounted due to it being a forced sale.”

Bloomberg Intelligence analysts noted that finding a buyer for TikTok’s U.S. operations that can both afford the transaction and deal with the accompanying regulatory scrutiny on data privacy makes a sale challenging. It could also make it difficult for a buyer to expand TikTok’s ads business, they wrote.

A consortium of businesspeople including billionaire Frank McCourt and O’Leary Ventures Chairman Kevin O’Leary put in a bid to buy TikTok from ByteDance. O’Leary has previously said the group would be willing to pay up to $20 billion to acquire the U.S. assets without the algorithm.

Unlike a Musk bid, O’Leary’s group’s bid would be free from regulatory scrutiny, O’Leary said in a Monday interview with Fox News.

O’Leary said that he’s “a huge Elon Musk fan,” but added “the idea that the regulator, even under Trump’s administration, would allow this is pretty slim.”

TikTok, X and O’Leary Ventures did not respond to requests for comment.

Watch: Chinese TikTok alternative surges