Apple in the AI race: Could an external AI model power Siri?

Apple (AAPL) is reportedly considering external artificial intelligence (AI) models like Anthropic (ANTH.PVT) or OpenAI (OPAI.PVT) to power Siri, according to Bloomberg reporting.

TechRadar editor at large Lance Ulanoff joins Asking for a Trend with Josh Lipton to discuss what the report signals about Apple's place in the AI race and the iPhone maker's unique position as an AI laggard with a massive user base.

To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here.

Apple weighing its options in the AI space, the company considering help from Anthropic or OpenAI to power a new version of Siri. For more, we're bringing in now Lance Ulanoff, editor-at-large of Tech Radar. Lance, my friend, it is always good to see you. So, Bloomberg reports, Lance, you saw this. Apple thinking about OpenAI or Anthropic to power a new version of Siri, so not relying on its own in-house models. You saw that headline, Lance, you saw the report. What do you make of it?

Well, I mean, look, everyone knows that Apple's behind. Apple's admitted it. Apple, you know, basically was trying to do too much at once. I mean, when we spoke to them after WWDC, they were talking about working on sort of V1 and V2 simultaneously. And it just wasn't where it wasn't up to Apple standards. So they couldn't release the Siri, the amazing Siri that was going to understand you and understand your your interface and talk to you more naturally. They just weren't ready to do it. And now, obviously, we know that they've admitted they're pushing it out into next year. But Apple has never really talked about pushing aside its own models, at least not publicly. You know, they're still trying to work on their models. They like to do as much locally, they like to do as much on their private cloud compute, which protects the privacy of their consumers. And this idea that they simply can't get their models to where they need to be and they're turning to the true experts, which is Anthropic and OpenAI among others who are out there doing this, to maybe replace their own, I'm not sure I believe it yet. I think that what I do believe about this report is that conversations are happening. And look, conversations could be happening just so Apple can learn more. You know, that they want to understand how are people doing this so we can do better. And if they find that we simply can't do better, then maybe they will spend those many billions of dollars to gain access to these models.

Lance, the folks over at CFRA, those analysts, now they're fans of Apple, they got to buy. He was their response to this report, and they said they said this is a good sign. It provides a hedge against Apple internal initiatives. And then they said, Lance, they said, although Apple has clearly fallen behind the AI race to others, we still expect the company to get it right over the next 12 months and believe it is uniquely and best positioned as a distributor of AI to the consumer. So that is the optimistic take. Do you do you share that optimism, Lance?

Well, they are in a good position. I mean, you think about the the the billions of iPhones out there, right? You think about everybody that is using their services, right? The touch points that Apple has with the population. So that's their unique position, right? If they can flip the switch on so that people are truly engaging with the AI that they're going to build. The problem is Apple doesn't seem to have the core expertise for the competition. It has struggled, and you know, I said to Apple a couple about a month ago, I said, you know, you guys play it very safe because of your commitment to privacy and security and and not sort of making the big mistake, whereas the competition in the AI space, they run a little fast and loose and they mop it up later on. That's not how Apple works. So there is a tension here between what you're talking about, the Apple's core, you know, ability to reach so many people and Apple's need to have that privacy and that control. And I don't know exactly how Apple solves it. This would be a very big deal because if they pull in a third party, there is a risk factor, right? When you pull in a cloud, you know, an Anthropic or OpenAI and you say now that model lives on our servers, you really have to say how is that model trained? Because now the liability is on us.

If they don't have that new version of Siri though, Lance, what would that mean for the iPhone upgrade cycle? Because you know, in just a few months, come September, you would expect Tim Cook to take the stage and introduce the new iPhone lineup.

Yeah, yeah, that's that 100%. I'm sure that's going to happen. Everyone expects an iPhone 17 line. And, you know, they they since they kind of have down pat the story on what's happening with their AI, they don't have to say that much about it. I don't think they'll oversell it. But yeah, it's becoming a problem because AI is moving markets, right? AI is the most important, the most transformative technology we have seen in a generation. That's not going anywhere. Apple needs to be at the forefront of it. It has to show something. I think it is going to be difficult in the fall because they won't be able to pair the new iPhone with their latest AI because it simply won't be ready unless they do something major in the interim. But even if they do, to get it baked into those new pieces of hardware would be very difficult.

Final question, Lance. How how do you think Apple finds itself in this position where it's reportedly they may have to look to Sam Altman's OpenAI or Anthropic?

Well, look, Apple said it to me, you know, that they want things to be at the Apple level, right? That unless it meets their requirements for performance, they're not going to put it out there. And so that's how they end up in that position because they keep looking at what they're doing, and if they're not satisfied, they have to find a way to be satisfied. And they know that this is, you know, this is very unlike Vision Pro where they kind of threw something out there and said, hey, maybe the consumers will love this, we're leading the way. This is them chasing after a market that is getting out of control, that they know that consumers are deeply, you know, they've embraced it, it is moving fast, the competition is moving much more quickly. They must do something, which probably means Apple has to change its approach.

Lance, always great to have you on the show. Thank you, sir.

It's a pleasure.