One year ago, Apple announced Apple Intelligence, its response to the wave of sophisticated chatbots and systems kicked off by the arrival of ChatGPT and the age of generative AI.

Analysts said Apple’s installed base of more than 1 billion iPhones, the data on its device and its custom-designed silicon chips were advantages that would help the company become an AI leader.

But it’s been an underwhelming 12 months since then.

Apple Intelligence stumbled out of the gate while rivals like OpenAI, Google and Meta have continued to make headway launching new generative-AI models. 

Now, investors are calling for Apple to do something major to catch up in AI, which is rapidly transforming the tech industry.

When CEO Tim Cook speaks at Apple’s annual Worldwide Developers Conference in Cupertino, California, investors on Monday, fans and developers will want to hear how the company’s approach to AI has changed. That’s especially important after some Apple executives have said that the technology could be the reason the iPhone gets supplanted by the next-generation of computer hardware.

“You may not need an iPhone 10 years from now,” Apple services chief Eddy Cue said in court last month in one of the government’s antitrust case against Google, adding that AI was a “huge technological shift” that can upend incumbents like Apple.

The Apple Intelligence rollout was rocky. The first features launched in October — tools for rewriting text, a new Siri animation and improved voice, and a tool that generates slideshow movies out of user photos — were underwhelming. One key feature, which came out in December, summarized long stacks of text messages. But it was disabled for news and media apps after the BBC discovered that it twisted headlines to display factually incorrect information.

But the biggest stumble for Apple came in early March, when the company said that it was delaying “More personal Siri,” a major improvement to the Siri voice assistant that would integrate it with iPhone apps so it could do things like find details from inside emails and make restaurant reservations.

Apple had been advertising the feature on television as a key reason to buy an iPhone 16, but after delaying the feature until the “coming year,” it pulled the ads from broadcast and YouTube. The company now faces class-action suits from people who claim they were misled into buying a new iPhone.

Although Apple Intelligence had a rough first year, the company hasn’t said much publicly. However, it’s reportedly reorganized some of its AI teams.

JPMorgan Chase analyst Samik Chatterjee said in a note this week that investor expectations were set for a “lackluster” WWDC, as the company still needs to bring to market the features it announced last year, versus “addressing the more material issue of lagging behind other large technology companies in relation to advancements in AI.”

Meanwhile, Apple is facing renewed competition in its core business.

OpenAI in May acquired the startup io for about $6.4 billion, bringing in former Apple chief designer Jony Ive to build AI hardware. The company hasn’t provided details about its future devices.

Meta has made a splash with its Ray-Ban Meta Glasses, selling over 2 million units since launching in 2021. The devices use Meta’s Llama large language model to answer spoken questions from the user. 

And last month, Android maker Google said its Gemini models will become the default assistant on Android phones. The company showed Gemini doing things that go beyond Siri’s capabilities, such as summarizing videos. Google also announced a $150 million partnership with Warby Parker to develop its own pair of AI-powered smart glasses.

A working Apple Intelligence is important for the company to encourage its users to buy new iPhones since devices released before the iPhone 15 Pro in 2023 don’t support the suite of features. But AI hasn’t been a key driver of sales for smartphones yet, and may not be for years, said Forrester analyst Thomas Husson.

“There’s been some new cool features and services, but I don’t think it has drastically changed the experience yet,” Husson said.

Apple declined to comment.

Apple focused its efforts on what could efficiently run on its battery-powered phones. The AI race, led by OpenAI and Google, was about bleeding-edge capabilities that required high-powered servers based on Nvidia graphics-processing units, or GPUs.

Then ChatGPT launched in late 2022, making AI the most important term in Silicon Valley. Soon after, Cook was telling investors that Apple was spending “a tremendous amount of time and effort” on the technology.

While Apple Intelligence is based on a series of language and diffusion models that the company trained itself, Apple hasn’t publicly competed with Google, OpenAI, Anthropic, or other companies in what are called “frontier models,” or the most capable AI systems that often have to be trained on large server clusters packed with Nvidia chips and fast memory.

The difference between the way Apple and its rivals approach AI can be seen in the company’s approach to capital expenditures. Apple spent $9.5 billion on capital expenditures in its fiscal 2024, or about 2.4% of its total revenue. 

The iPhone maker has rented the computing power needed to train its foundation models, it revealed last year, from Google Cloud and other providers. Apple’s rivals are gobbling up billions of dollars of GPUs to push the technology forward. 

Meanwhile, Meta, Amazon, Alphabet and Microsoft are planning to collectively spend more than $300 billion this year on capital expenditures, up from $230 billion last year. Amazon alone is aiming to spend $100 billion, and Microsoft has allocated $80 billion.

Apple’s best chance to quickly catch up up may be to do what it’s done many times in the past: Buy a company, and turn it into a killer feature.

It bought PA Semi in 2008 for $278 million, and turned it into the seed for its semiconductor division. Ahead of releasing the Vision Pro headset, Apple bought over 10 startups that worked on virtual and augmented reality. Even Siri was a startup before Apple bought it for more than $200 million in 2010.

With $133 billion in cash and marketable securities on hand as of the start of May, there isn’t much Apple can’t buy, assuming it could get regulatory clearance. However, OpenAI, Apple’s current Siri partner, is likely out of reach with a valuation of $300 billion. And given OpenAI’s new relationship with Ive to build hardware, there are reasons for Apple to slow the partnership down.

Anthropic, whose Claude chatbot is powered by one of the leading AI models, was valued at $61.5 billion in a funding round in March. In the Google antitrust case, Cue, a senior vice president at Apple, mentioned Anthropic as a potential replacement for Google as the default search option in the iPhone’s Safari browser.

“They probably need to acquire Anthropic,” said Deepwater Asset Management’s Gene Munster, who has followed Apple for decades, in an interview.

That would be by far Apple’s largest acquisition. To date, the most the company has paid is $3 billion, when it bought Beats Electronics in 2014 for $3 billion, part of an effort to catch Spotify in the music streaming market.

Apple could buy a company that’s developing AI-based apps, even if they’re on open-source or other company models. Perplexity, which is currently fundraising at a $14 billion valuation, has shown strong interest in the smartphone market and understanding of the value of being a default AI service.

In April, Perplexity announced a partnership with Motorola, and it’s reportedly in talks with Samsung to integrate its technology into the South Korean company’s version of Android, as well as take investment from the Apple rival. Cue mentioned that Apple had been in discussions with Perplexity about its technology at the May trial.

It’s also possible for Apple to treat frontier AI like it treated search — as a service that can be filled with a partnership. Apple software chief Craig Federighi implied as much last year at a panel discussion during WWDC, saying that Apple would like to add other AI models, especially for specific purposes, into its Apple Intelligence framework.

Federighi specifically mentioned Google, whose Gemini can now fluidly speak to the user and handle input that comes from photos, videos, voice or text. Documents revealed during the Google trial showed executives from Apple, including Cue and M&A chief Adrian Perica, were involved in the negotiations over Gemini. 

While Apple is still pushing “App Intents” — the same system powers stuff like lock screen widgets — the framework for how they work with Siri hasn’t been released yet.

Tesla shares climbed in U.S. premarket trading Friday after tensions between CEO Elon Musk and President Donald Trump fueled a $152 billion rout for the stock a day earlier.

Shares of Tesla were up 4.2% in premarket trading as of 7:31 a.m. ET. Analysts cited a Politico report that Trump had scheduled a call Friday with Musk to broker a truce. However, Trump’s Chief of Staff Susie Wiles told NBC News on Friday that there were currently “no plans” for such a call.

“Musk needs Trump and Trump needs Musk for many reasons and these two becoming friends again will be a huge relief for Tesla shares,” wrote Wedbush Securities analyst Dan Ives in a note Friday morning. “We will be monitoring the situation closely today but we believe Tesla shares are way oversold on this news.”

Musk and Trump have come to verbal blows in recent days as the Tesla chief’s tenure as head of the U.S. Department of Government Efficiency came to an end last week.

Trump initially praised Musk’s handling of DOGE, an initiative started by the Trump administration that aimed to cut costs within the federal government. However, he changed his tone on Thursday after comments from Musk criticizing Trump’s so-called “big, beautiful bill,” a sweeping package of tax and public spending cuts.

Musk slammed the bill on Thursday calling it a “disgusting abomination” — to which Trump replied that though he and Elon “had a great relationship,” he doesn’t know “if we will anymore.”

Tesla shares tanked 14% following the public clash, wiping $152 billion from the electric vehicle maker’s market capitalization and putting it below the $1 trillion benchmark.

Omada Health priced its IPO at $19 per share on Thursday, in the middle of the expected range.

The virtual chronic care company said in a press release that 7.9 million shares are being sold in the offering, amounting to $150 million.

Omada, founded in 2012, will trade on the Nasdaq under the ticker symbol “OMDA.” The company filed its initial prospectus in May and updated the document with an expected pricing range of $18 to $20 per share. 

At the IPO price, Omada is worth about $1.1 billion, though that number could be higher on a fully diluted basis. That’s right around its private market valuation from 2022, when Omada announced a $192 million funding round that pushed its valuation above $1 billion.

U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.

Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. Sean Duffy, Omada’s CEO, co-founded the company with Andrew DiMichele and Adrian James, who have both moved on to other ventures.

It’s the second digital health IPO in a matter of weeks following an extended drought for the industry. Digital physical therapy startup Hinge Health debuted on the New York Stock Exchange in May.

The tech IPO market has been showing signs of life, with Hinge being one of the latest offerings. On Thursday, shares of crypto company Circle Internet soared 168% in their New York Stock Exchange debut. Fintech company eToro started trading last month, and Chime Financial, which offers online banking services, is set to hit the market next week.

Omada’s revenue increased 57% in its first quarter to $55 million from $35.1 million a year earlier, according to its prospectus. For 2024, revenue rose 38% to $169.8 million from $122.8 million the previous year.

The company’s net loss narrowed to $9.4 million in the first quarter from $19 million a year ago.

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