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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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Inside a Utah desert facility preparing humans for life on Mars

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Inside a Utah desert facility preparing humans for life on Mars

Hidden among the majestic canyons of the Utah desert, about 7 miles from the nearest town, is a small research facility meant to prepare humans for life on Mars.

The Mars Society, a nonprofit organization that runs the Mars Desert Research Station, or MDRS, invited CNBC to shadow one of its analog crews on a recent mission.

MDRS is the best analog astronaut environment,” said Urban Koi, who served as health and safety officer for Crew 315. “The terrain is extremely similar to the Mars terrain and the protocols, research, science and engineering that occurs here is very similar to what we would do if we were to travel to Mars.”

SpaceX CEO and Mars advocate Elon Musk has said his company can get humans to Mars as early as 2029.

The 5-person Crew 315 spent two weeks living at the research station following the same procedures that they would on Mars.

David Laude, who served as the crew’s commander, described a typical day.

“So we all gather around by 7 a.m. around a common table in the upper deck and we have breakfast,” he said. “Around 8:00 we have our first meeting of the day where we plan out the day. And then in the morning, we usually have an EVA of two or three people and usually another one in the afternoon.”

An EVA refers to extravehicular activity. In NASA speak, EVAs refer to spacewalks, when astronauts leave the pressurized space station and must wear spacesuits to survive in space.

“I think the most challenging thing about these analog missions is just getting into a rhythm. … Although here the risk is lower, on Mars performing those daily tasks are what keeps us alive,” said Michael Andrews, the engineer for Crew 315.

Watch the video to find out more.

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Apple scores big victory with ‘F1,’ but AI is still a major problem in Cupertino

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Apple scores big victory with 'F1,' but AI is still a major problem in Cupertino

Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen 

Mike Segar | Reuters

Apple had two major launches last month. They couldn’t have been more different.

First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer’s conference, WWDC. Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, “F1,” debuted to over $155 million — and glowing reviews — in its first weekend.

While “F1” was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services business and its ability to tap into culture, Wall Street’s reaction to the company’s AI announcements at WWDC suggest there’s some trouble underneath the hood.

“F1” showed Apple at its best — in particular, its ability to invest in new, long-term projects. When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called “Hala” that didn’t even share its box office revenue.

Despite Apple TV+ being written off as a costly side-project, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California. That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record. Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films.

The success of “F1” also highlights Apple’s significant marketing machine and ability to get big-name talent to appear with its leadership. Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film. To promote “F1,” Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a video with actual F1 racer Lewis Hamilton, who was one of the film’s producers.

(L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of “F1: The Movie” in Times Square on June 16, 2025 in New York City.

Jamie Mccarthy | Getty Images Entertainment | Getty Images

Although Apple services chief Eddy Cue said in a recent interview that Apple needs the its film business to be profitable to “continue to do great things,” “F1” isn’t just about the bottom line for the company.

Apple’s Hollywood productions are perhaps the most prominent face of the company’s services business, a profit engine that has been an investor favorite since the iPhone maker started highlighting the division in 2016.

Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales. Plus, even the biggest box office smashes would be small on Apple’s scale — the company does over $1 billion in sales on average every day.

But movies are the only services component that can get celebrities like Pitt or George Clooney to appear next to an Apple logo — and the success of “F1” means that Apple could do more big popcorn films in the future.

“Nothing breeds success or inspires future investment like a current success,” said Comscore senior media analyst Paul Dergarabedian.

But if “F1” is a sign that Apple’s services business is in full throttle, the company’s AI struggles are a “check engine” light that won’t turn off.

Replacing Siri’s engine

At WWDC last month, Wall Street was eager to hear about the company’s plans for Apple Intelligence, its suite of AI features that it first revealed in 2024. Apple Intelligence, which is a key tenet of the company’s hardware products, had a rollout marred by delays and underwhelming features.

Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, like making a restaurant reservation. In the age of OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini, the expectation of AI assistants among consumers is growing beyond “Siri, how’s the weather?”

The company had previewed a significantly improved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026. At WWDC, Apple didn’t offer any updates about the improved Siri beyond that the company was “continuing its work to deliver” the features in the “coming year.” Some observers reduced their expectations for Apple’s AI after the conference.

“Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view,” wrote Jefferies analysts this week.

Siri should be an example of how Apple’s ability to improve products and projects over the long-term makes it tough to compete with.

It beat nearly every other voice assistant to market when it first debuted on iPhones in 2011. Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open-ended questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI technology that can hold a conversation.

Apple’s strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has. And Google doesn’t have the same reflex against collecting data and cloud processing as privacy-obsessed Apple.

Some analysts have said they believe Apple has a few years before the company’s lack of competitive AI features will start to show up in device sales, given the company’s large installed base and high customer loyalty. But Apple can’t get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino.

“The three-year problem, which is within an investment time frame, is that Android is racing ahead,” Needham senior internet analyst Laura Martin said on CNBC this week.

Apple’s services success with projects like “F1” is an example of what the company can do when it sets clear goals in public and then executes them over extended time-frames.

Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the technology that has captivated Silicon Valley.

Wall Street’s anxiety over Apple’s AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri’s engine with Anthropic or OpenAI’s technology, as opposed to its own foundation models.

The move, if it were to happen, would contradict one of Apple’s most important strategies in the Cook era: Apple wants to own its core technologies, like the touchscreen, processor, modem and maps software, not buy them from suppliers.

Using external technology would be an admission that Apple Foundation Models aren’t good enough yet for what the company wants to do with Siri.

“They’ve fallen farther and farther behind, and they need to supercharge their generative AI efforts” Martin said. “They can’t do that internally.”

Apple might even pay billions for the use of Anthropic’s AI software, according to the Bloomberg report. If Apple were to pay for AI, it would be a reversal from current services deals, like the search deal with Alphabet where the Cupertino company gets paid $20 billion per year to push iPhone traffic to Google Search.

The company didn’t confirm the report and declined comment, but Wall Street welcomed the report and Apple shares rose.

In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman.

“I can’t see Apple doing that,” Martin said.

Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging about hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google’s DeepMind. That came after Zuckerberg hired Scale AI CEO Alexandr Wang to lead a new AI division as part of a $14.3 billion deal.

Meta’s not the only company to spend hundreds of millions on AI celebrities to get them in the building. Google spent big to hire away the founders of Character.AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster.

Apple, on the other hand, hasn’t announced any big AI hires in recent years. While Cook rubs shoulders with Pitt, the actual race may be passing Apple by.

WATCH: Jefferies upgrades Apple to ‘Hold’

Jefferies upgrades Apple to 'Hold'

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Musk backs Sen. Paul’s criticism of Trump’s megabill in first comment since it passed

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Musk backs Sen. Paul's criticism of Trump's megabill in first comment since it passed

Tesla CEO Elon Musk speaks alongside U.S. President Donald Trump to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.

Kevin Dietsch | Getty Images

Tesla CEO Elon Musk, who bombarded President Donald Trump‘s signature spending bill for weeks, on Friday made his first comments since the legislation passed.

Musk backed a post on X by Sen. Rand Paul, R-Ky., who said the bill’s budget “explodes the deficit” and continues a pattern of “short-term politicking over long-term sustainability.”

The House of Representatives narrowly passed the One Big Beautiful Bill Act on Thursday, sending it to Trump to sign into law.

Paul and Musk have been vocal opponents of Trump’s tax and spending bill, and repeatedly called out the potential for the spending package to increase the national debt.

On Monday, Musk called it the “DEBT SLAVERY bill.”

The independent Congressional Budget Office has said the bill could add $3.4 trillion to the $36.2 trillion of U.S. debt over the next decade. The White House has labeled the agency as “partisan” and continuously refuted the CBO’s estimates.

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The bill includes trillions of dollars in tax cuts, increased spending for immigration enforcement and large cuts to funding for Medicaid and other programs.

It also cuts tax credits and support for solar and wind energy and electric vehicles, a particularly sore spot for Musk, who has several companies that benefit from the programs.

“I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” Trump wrote in a social media post in early June as the pair traded insults and threats.

Shares of Tesla plummeted as the feud intensified, with the company losing $152 billion in market cap on June 5 and putting the company below $1 trillion in value. The stock has largely rebounded since, but is still below where it was trading before the ruckus with Trump.

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Tesla one-month stock chart.

— CNBC’s Kevin Breuninger and Erin Doherty contributed to this article.

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