Apple’s AI Play: Gurman Is Right—And Completely Wrong
Apple may be behind in everyday AI—but that's not where the real money is
Why it matters:
Mark Gurman argues that Apple is falling behind in AI, and he’s not wrong—at least when it comes to everyday AI. But what if Apple’s real AI ambitions lie elsewhere? Rather than chasing chatbots and voice assistants, Apple may be positioning itself for the higher-margin business of AI hardware and infrastructure.
Breaking it down:
The Everyday AI Race—Where Apple Is Behind
Gurman highlights Apple’s struggles with Apple Intelligence, its suite of AI-powered features. Compared to OpenAI’s ChatGPT, Google’s Gemini, and Amazon’s Alexa+, Apple’s AI efforts appear underwhelming.
Siri still lags behind – Apple pioneered voice assistants with Siri in 2011, but it has since fallen behind more conversational competitors like ChatGPT Voice and Alexa+.
Apple’s in-house LLMs are underwhelming – Apple’s decision to develop its own AI models means it has fewer training cycles and less real-world feedback than OpenAI and Google, putting it at a disadvantage.
Consumer interest is low – While Apple Intelligence offers features like Genmoji and smarter notifications, reports suggest real-world adoption is lagging, indicating these tools aren’t compelling enough to drive increased hardware sales.
Gurman is right: Apple isn’t leading in consumer-facing, everyday AI.
But maybe that’s by design.
Everyday AI Is Becoming a Commodity
While consumer-facing AI gets a lot of attention, the economics of everyday AI aren’t great.
Tech companies are struggling to monetize AI – OpenAI, Anthropic, and Google are spending billions training LLMs, but they have yet to prove AI is a sustainable business model.
AI is being bundled for free – Microsoft is giving away Copilot with Windows, Google is embedding Gemini into Android, and Amazon is integrating AI across its services. This suggests that everyday AI is becoming a low-margin feature rather than a product people will pay for.
Apple avoids commodity markets – Historically, Apple has focused on high-margin premium products, not race-to-the-bottom services. If everyday AI is becoming a low-margin, utility-like business, it may not be Apple’s priority.
Perhaps Apple sees everyday AI as a necessary feature rather than a core business opportunity. If so, its real AI ambitions may lie elsewhere.
The Real Money: Game-Changing AI and Hardware
Rather than competing in the crowded AI assistant market, Apple may be positioning itself as a leader in AI hardware and enterprise infrastructure.
Massive AI investment – Apple recently announced a $500 billion commitment to AI manufacturing and infrastructure, including a Houston-based AI server plant.
Custom AI chips – Apple is developing AI-optimized silicon with a focus on low power and efficiency. If successful, these chips could offer a cost-effective alternative to NVIDIA’s industry-dominating AI hardware.
Enterprise-grade AI infrastructure – Apple’s Private Cloud Compute initiative suggests an interest in offering secure, high-performance AI solutions, potentially targeting businesses and institutions. While currently dependent upon Amazon chips, ultimately Apple will want to transition to its own silicon.
If this is Apple’s real AI play, it would align with its historical strengths:
High-margin AI chips – Apple could be looking to undercut NVIDIA by offering cheaper, more power-efficient AI hardware.
On-device AI performance – Apple’s long-term strategy may be to sell hardware that’s indispensable for AI applications, making its devices the best choice for users who want local AI processing.
AI-powered infrastructure – Secure, private AI compute solutions could appeal to governments, enterprises, and institutions that want AI but need more control over their data.
Gurman may be wrong: Apple isn’t necessarily failing at AI—it may just be playing a different game altogether.