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.”
The image-sharing company reported revenues of $1.15 billion, ahead of a $1.14 billion estimate from analysts surveyed by LSEG. The figure represented 18% year-over-year growth.
Along with the revenue beat, the company offered an upbeat sales outlook. Pinterest said its expects revenues between $837 million and $852 million during the first quarter, versus and LSEG estimate of $833 million.
“Our strategy is paying off,” said Pinterest CEO Bill Ready in a statement. “People are coming to Pinterest more often, the platform has never been more actionable and our lower funnel focus is driving results for users and advertisers.”
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Global monthly active user figures also surpassed estimates, showing 11% growth from a year ago. Pinterest reported 553 million users during the period, versus the 547.4 million expected by Wall Street. Revenue per user also topped estimates.
The results come amid a flurry of strong earnings reports from social media companies in recent weeks. Snap shares surged after the bell Tuesday on better-than-expected results, while Meta Platforms recently topped results and reaffirmed plans for heavy artificial intelligence spending.
SoftBank is close to finalizing a $40 billion primary investment in OpenAI at a $260 billion pre-money valuation, sources told CNBC’s David Faber.
SoftBank would pay out the funding, which would mean a $300 billion post-money valuation for OpenAI, over the next 12 to 24 months, with the first payment coming as soon as spring, Faber reported Friday. SoftBank would be able to syndicate as much as $10 billion of the amount.
The new funding would mean SoftBank surpasses Microsoft as the artificial intelligence startup’s top backer. OpenAI was last valued at $157 billion by private investors in October.
The round was initially expected to award OpenAI a valuation of $340 billion, but a source familiar with the matter later told CNBC that the amount would be closer to $300 billion.
Part of the funding is expected to be used for OpenAI’s commitment to Stargate, sources told CNBC. Stargate is a joint venture between SoftBank, OpenAI and Oracle that was announced by President Donald Trump in January. The plan calls for billions of dollars to be invested in U.S. AI infrastructure.
Read more CNBC news on OpenAI
OpenAI launched its ChatGPT chatbot in late 2022, kicking off the generative AI race. Since then, the company has aggressively competed against the likes of Elon Musk’s xAI, as well as Microsoft, Google, Amazon, Meta and Anthropic. The generative AI market is predicted to top $1 trillion in revenue within a decade.
The latest funding round comes after SoftBank on Monday committed to spending $3 billion per year on OpenAI’s tech for itself and its subsidiaries, including British chip designer Arm. SoftBank and OpenAI also announced a joint venture, billed as “SB OpenAI Japan,” which will market OpenAI’s enterprise tech to companies in Japan.
OpenAI in January released ChatGPT Gov, an AI platform built specifically for the U.S. government. The startup pitched the new platform as having more security than ChatGPT Enterprise. ChatGPT Gov will allow government agencies to feed “non-public, sensitive information” into OpenAI’s models while operating within their own secure hosting environments, the company said.
The government offering follows a series of moves by OpenAI and CEO Sam Altman that appeared to be aimed at appeasing Trump. Altman contributed $1 million to Trump’s inauguration, attended the event alongside other tech CEOs and has publicly signaled his admiration for the president.
OpenAI’s new funding comes after Chinese rival DeepSeek saw its app soar to the top of Apple’s App Store rankings in January after its debut. DeepSeek’s breakthrough R1 model roiled U.S. markets on reports that the powerful model was trained at a fraction of the cost of U.S. competitors’ models.
Altman described DeepSeek’s R1 as “impressive,” and wrote on X that “we will obviously deliver much better models and also it’s legit invigorating to have a new competitor!”
Katie Austin normally publishes fitness content to her Instagram and YouTube channel. But this week, she’s been posting a steady trickle of content from New Orleans.
That’s because Austin, 31, from California, is one of hundreds of creators who have swarmed the Big Easy for Super Bowl 59, getting paid large contracts to make social media content for big-name brands like Electronic Arts and Nike.
Austin was sent to New Orleans this week by Snap and the NFL to give her fans a behind-the-scenes look at the Super Bowl. She’s also involved in integrations around the games with brands like Microsoft and Verizon, for whom she is hosting a promotional fan event.
“I can reach a lot of people myself,” said Austin, who has about 2 million followers across all platforms. “So sending a creator like me to an experience, I am engaging my followers to get that awareness.”
As the 2024 NFL season concludes, viewership and engagement among Generation Z and Generation Alpha has hit a record high, according to the NFL. Austin’s role underscores a new reality where online creators are treated just like traditional celebrities, in an attempt to attract younger audiences to football.
The NFL has made this push in partnership with social apps like YouTube and Snapchat, highlighting the league’s evolving marketing strategies that are increasingly focused on digitally native audiences.
“You start to look at these different cohorts of fans, especially the ones that are a little more difficult to reach through linear and you start to see the role in which creators can play and broaden that audience,” said Ian Trombetta, NFL senior vice president of social, influencer and creator marketing.
For this year’s Super Bowl, featuring the Kansas City Chiefs and Philadelphia Eagles, brands like Nike and EA are sponsoring creators to attend the event and post content.
Austin didn’t say how much she’s getting paid for the content she’s making at Super Bowl 59, but some brands have signed deals of up to six figures with some creators to promote the event, said Victoria Bachan, global president of Sixteenth, a creator talent management company.
“You can no longer really have a media strategy for tentpole opportunities like this that do not include a creator level,” said Bachan.
Brands are increasing their spending on influencer activations for this year’s Super Bowl between 25% and 35%, and they’re diverting funds from traditional TV-only advertising to do so, according to a study by Captiv8, an influencer marketing platform.
The push for creators comes after concerns about younger audiences’ lack of interest in sports had grown. A 2022 Emory Goizueta Business School study found that 27% of Gen Z identify as “anti-sports,” compared with 7% of millennials and 5% of Generation X.
The NFL’s push to engage creators, which began in 2019, has already paid off. The percentage of Gen Z and Gen A who identify as fans has grown steadily for the last three years to an all-time high as the league’s investment in creators has grown, according to the NFL.
Besides Austin, Snapchat sent a handful of other creators to the Super Bowl to post behind-the-scenes content using augmented reality filters.
Meanwhile, YouTube, which secured a $2 billion-per-year deal for the rights to “NFL Sunday Ticket” in 2022, has established itself as pivotal to connecting the league with digital audiences. This year, YouTube will debut as the first official sponsor of the Super Bowl Tailgate, which will feature events with top creators like Kristy and Desmond Scott and a livestreamed performance by rapper Post Malone before the game on Sunday.
To adapt to these changes, the NFL has eased up on restrictions around the use of official league footage by creators on their YouTube channels.
The league and YouTube in January expanded their “Access Pass” program to allow retired NFL players like Cam Newton, Jason Kelce and Kurt Benkert to use league footage in their videos.
“There’s this pathway now that certainly did not exist five to 10 years ago,” Trombetta said. “It’s really cool especially as these athletes showcase more of their personalities off the field.”