It has taken just three years for the GenAI generation of AI to reach the level of use the Internet itself took 23 years to achieve, says legendary US investor Mary Meeker in her latest Trends report.
That’s why, unless Apple has viable plans we don’t yet know about, it needs make an AI-related acquisition soon. It needs to do so because the new generation of AI is already achieving a global resonance we’ve never seen before.
With the impact of generative AI (genAI) now spreading across tech, finance, social, politics, and employment, Apple needs to be part of the convergence to maintain relevance.
Where the puck is going
Meeker’s report gives you a solid sense of this, and in doing so shows the extent to which genAI is being deployed across developing economies in Africa, Asia, Latin America, and the Middle East. That matters more because many of these areas have not enjoyed ready access to the internet before, which means they aren’t starting with Usenet and scaling to FaceTime – they are beginning their internet adventure with AI. These first-to-AI cohorts will soon become the first “AI-native” populations, driving economic growth in those geographies.
Speed and execution
This is a fast game – more Blink than Bridge. Meeker’s report points at the extent of this disruption. “Seem like change happening faster than ever?” it asks. “Yes, it is,” the report responds, providing a range of metrics to show it — not least the swiftness with which genAI has achieved 800 million weekly active users since October 2022.
“Rapid advances in artificial intelligence, compute infrastructure, and global connectivity are fundamentally reshaping how work gets done, how capital is deployed, and how leadership is defined – across both companies and countries,” the report says.
Smarter than nothing
Apple, stung by slow development of Apple Intelligence, needs to maintain a place in the race — but the speed of this race underlines the huge risk the company has been forced to take as a result of its well-publicized AI failures. Apple can’t keep making these errors. It should, perhaps, have been faster to embrace OpenAI when it emerged, rather than permitting Microsoft to get there first.
That error gave Microsoft Copilot wings Siri still can’t match.
Apple may be on the cusp of repeating that mistake with Samsung, which is allegedly looking to take a position with Perplexity. Apple is already working with Perplexity, but recent reports claim Samsung is preparing a wide-ranging deal to use Perplexity AI to provide search on Samsung smartphones. Some wire reports this morning suggest Apple is also interested in Perplexity, citing an older statement Eddy Cue last month made during his testimony at the Google Search trial: “We’ve been pretty impressed with what Perplexity has done, so we’ve started some discussions with them about what they’re doing.”
Grab your partners
The risk is that Perplexity goes with Samsung, leaving Apple in need of a strong AI partner. Apple’s approach might be to become polyamorous, with partnerships with OpenAI, Google Gemini, Perplexity, and others providing some of what its devices need to be part of the AI deployment party. That may even be enough, for a while.
But as competitors begin to chip away at the Android/Apple duopoly with their own alternative hardware capable of running AI (i.e., precisely the kind of hardware former Apple designer, Jony Ive is working on with OpenAI), Apple has too much to lose — far too much to lose.
Existential crisis
That’s why one recent leak claiming Apple’s management has adopted a “by any means necessary” approach to bringing its platforms up to speed for AI is reassuring. After all, it’s not such a huge step, once you accept the need for partnerships with AI service providers, to figure out that perhaps there’s a good reason to acquire one of those providers.
Not only does Apple have the cash to do it, but just as its huge investment in processor maker PA Semi eventually drove decades of hardware design, so too will AI drive the coming decades in computing. It’s an existential necessity.
But does Apple need to acquire one of the larger household names in AI? Probably not.
Raise them up
There are other firms, some small, some large, that may already have some of the tech that Apple needs. Many of these may lack the infrastructure to deliver their services at a big enough scale to meet the needs of Apple’s billion-plus users.
Apple might be able to help with that. It has, after all, been making significant investment in Private Cloud Compute — to the extent we’ve even heard it has production lines churning out servers to support that service.
Why make so many servers? With 1 billion users, it might just be to support Apple Intelligence. It could also perhaps enable Apple to offer developers an AWS-style B2B service for secure and private AI. But it could also become an infrastructure on which to host any AI solution Apple might eventually acquire, enabling promising tech to swiftly reach an audience of millions at a time when AI adoption is absolutely spiking.
Will this happen? Even Bloomburg’s Mark Gurman doesn’t seem to know just yet.
Should it? Probably.
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