Back in 2011 when Apple
introduced Siri, it was billed as a
breakthrough feature for the iPhone. I’m really excited to show
you Siri. What is the weather like
today? Here’s the forecast for
today. It is that easy. It wasn’t perfect,
but it was first. Siri was a really big deal
when it first launched back in 2011, because it was a
whole new way to interact with your iPhone. This was
actually a pet project of Steve Jobs. He saw Siri
demoed as a separate app before Apple acquired the
company, and was just kind of blown
away by what Siri could do. He really saw the long term
vision for this kind of paradigm, where you talk to
your devices instead of typing, and at the time it
seemed very revolutionary. But 15 years after it
launched, the voice assistant still
mishears things, misses context,
and now the rollout of a new and improved Siri has been
delayed. And last year,
the tech giant introduced Apple Intelligence. But critics say Apple has
not evolved to meet the new AI standards set by OpenAI’s
ChatGPT, Google’s Gemini,
or Amazon’s Alexa. If you look at everything
they announced in WWDC last year, you know a lot of that
hasn’t come to fruition. They’ve hit a lot of speed
bumps. Since the November 2022
release of ChatGPT, generative AI has taken off. Tech giants like Microsoft
and Google have centered their strategies around
Large Language Models, LLMs, from search to productivity. But some say Apple has
fallen behind. You had ChatGPT,
you had Anthropic’s Claude, and so many other of these
artificial intelligence products coming out there
outside of Apple’s ecosystem, and Apple still
hasn’t been able to catch up. Apple’s stock has also taken
a hit. Over the past six months,
it’s fallen more than 16%, while other tech companies
like Microsoft and Google have pushed ahead in AI. If Apple was as successful
in their own pursuits for generative AI as we’ve seen
some of their mega-cap competitors, Apple stock
price would be higher than it is today. In November 2023,
during an interview with CNBC, Apple’s hardware
leaders insisted the company wasn’t falling behind. Critics have been surprised
that Apple appears to be f alling behind when it comes
to AI. How do you respond? I don’t believe we are. Not too worried. Not too worried. Since that interview,
the AI landscape has moved fast and Apple’s position in
it has only grown more uncertain. So,
what went wrong with Siri? And can Apple still lead in
AI, or is it too late to catch
up? While some iPhone users love
the latest updates to Siri… The new Siri in iOS
18 is so good. The new interface that
lights up a rainbow around the edges is so much better, and it reacts to your voice
in real time. But most importantly,
Siri is actually smarter now. Others say it’s not the way
it should be in the age of AI. Dear Tim Cook,
your Hey Siri does not work. On the new iPhones,
it does not. I need to know if it’s only
me that is having severe issues with Siri. It literally can’t spell a
sentence correctly. Hey Siri, could you send a
message please? Hey Siri? Siri isn’t really much of an
update. It kind of sucks. For
example, is the NBA player Zach
LaVine playing tonight? SIRI: Okay- Come on. It should be able to tell me
instead of bringing up stuff from the web. Siri is one where there was
so much promise but obviously been very
disappointing, especially after that first
splash. While Siri was
groundbreaking in 2011, Apple didn’t build on that
early lead. Over time, the assistant
fell behind as rivals launched smarter,
faster, more adaptive AI tools. There are a number of things
that have held Siri back since it launched several
years ago, and it didn’t take long for
competitors to really catch up to what Siri was doing:
most notably Amazon with Alexa. Apple has
traditionally been a hardware company. They make
great hardware, not so great at the software
and services bit of things, and so Siri kind of stayed
the same for several years after it first launched. Apple’s strategy has been
focused on building generative AI models into
its devices, aiming to make daily tasks
easier, but industry watchers say
Apple has been reactive and slow to match the moves of
rivals like Google and Microsoft. In June of 2024,
Apple told the world, “Hey, we’re going to take
this new large language model concept. We’re going to make Siri
more like ChatGPT this year.” Back just earlier
this spring, Apple said, “Oops,
we aren’t able to do this. The product is not where we
thought it would be at this point.” So this was kind of
a huge miss, especially as Apple was
already perceived to be behind in artificial
intelligence. So, what slowed Apple down? Experts say missed
opportunities in model development and internal
fragmentation. They’re not developing the
models in-house and implementing them in-house.
They’re relying on third parties and then following
the trend. I think by relying on OpenAI
or increasingly other players to be able to do
that, they lose that control. They lose the ability to
implement the guardrails, the controls necessary to be
able to effectively build the correct solution and
implement it most effectively and most user
friendly to ensure that it actually aligns with their
core principles. Apple restructured its AI
teams, delayed key Siri updates,
and was slower than rivals to hire top LLM talent. In 2024, when Apple finally
introduced its generative AI platform, Apple
Intelligence, users were hopeful,
but the rollout stumbled. Apple Intelligence started
rolling out this fall, and it had several different
kinds of features. Apple also did another
feature that would summarize your notifications,
and Apple actually kind of got into hot water for this
because the artificial intelligence system was
summarizing news stories incorrectly. So,
for example, the BBC had a big problem
with this where they were pushing out news alerts to
people’s phones like normal, but Apple Intelligence was
interpreting it incorrectly and giving the wrong answer: literally fake news pushed
to people’s screens. That was another stumble out
the gate here for the Apple Intelligence system. It was
supposed to kind of smartly tell you what was going on
with all your apps, and it didn’t really live up
to that promise, so they had to walk some of those
features back. The major challenge has been
the hallucinations around the news alerts,
which have been pretty significant. The other
factor is around differentiation, and it’s
inability to keep up, inability to act to the
leading edge. So when you when you look at
Google, Amazon, Microsoft and others
who are building in-house and developing AI
capabilities, they’re able to bring
products to market, test, evaluate them,
add to them. Siri, in its most basic form
and functionality, has probably not delivered
the virtual assistant experience that your average
iPhone user is seeking. Apple can still win within
the market, but it needs those upgrades
to become the virtual assistant that I think we
can all dream the dream and thinking about. Tim Cook addressed this in
Apple’s Q2 2025 earnings call. With regard to the more
personal Siri as you mentioned, we just need more
time to complete the work so they meet our high quality
bar. Apple declined CNBC’s
request for an interview for this story. Apple’s AI challenges go
beyond Siri: t hey’re also about
infrastructure, from cloud computing to
custom chips to model development. Unlike
competitors Google and Microsoft, Apple has not
built the kind of full stack AI pipelines or hyperscale
cloud systems needed to support cutting-edge
generative AI. Instead, Apple’s leaned in
to a very different approach: privacy-first,
on-device AI and outside partnerships. Apple is different,
right? They don’t have a cloud business. With Apple
Intelligence, at least Apple’s own
technology, t he goal is to be able to
say something to the effect of, “Hey Siri,
find the picture of my wife in a red dress.” To drive
those queries are much smaller: you could run those
on your device, so you don’t need cloud
infrastructure necessarily to run those queries. Apple has partnered with
outsiders for some AI features: OpenAI in the US
and Alibaba in China. And Apple Intelligence is
only available on newer devices: iPhones with the
A17 Pro chip, which include the iPhone 15
Pro and the iPhone 16 lineup, and iPads and Macs
with A17 Pro or M1 chips. I think Apple,
by partnering with OpenAI, then partnering potentially
with Google and Alibaba, and doing all of these
different partnerships means that it’s harder to provide
that R&D process, that iterative rollout,
which supports that kind of more effective go-to-market
and implementation. However, you can kind of
look at ways in which their partner model that they’re
going with, with generative AI, could be an asset,
could be an opportunity to kind of provide the
differentiation. The strategy means the
models Apple trains are smaller but also more
limited. If you ask broad questions
like “How does quantum theory affect chip design?”
Apple hands that off to OpenAI. Still,
Apple is spending heavily to close the gap. In February,
it pledged more than $500 billion in US investments
over four years, including new chip
facilities, AI infrastructure,
and hiring. The $500 billion investment, this was something that
Apple does every four years at the beginning of a new
presidential term. They like to have a little
gift for whoever the new president is or whoever is
just sworn in. Now, there’s a lot of fuzzy
math going on here, and they don’t exactly say
where all that money is going. In this case,
what they promised the Trump administration is just one
factory, and that is going to be one
in Houston, Texas that makes artificial
intelligence servers for that private cloud that runs
Apple Intelligence. The company is also
reportedly building its own AI chips under Project ACDC, expanding AI teams and
testing localized LLM integrations. But the
fundamental issue remains: Apple still doesn’t own the
full stack. Without the hyperscaler,
without that public cloud infrastructure, they don’t
have the pond ecosystem for R&D and implementation that
the others do. I think there’s always going
to be challenges around fighting it out with the
Googles of the world i f in an AI race, if they don’t
have those in-house public cloud capabilities. Unlike rivals like Meta,
Apple has spent years prioritizing privacy. That means it has not
collected the same volume of user data needed to train
powerful AI models. It’s a strategy that builds
brand trust, but limits flexibility. This is what Apple’s always
done, and they’ve always had to kind of balance the
privacy of its users versus the latest and greatest
features. And when it comes to AI, we can see the
disadvantage, at least, to that mindset,
because without using just the open web in the same way
and without using customer data in the same way that
Google and OpenAI and so many others have been doing
— Grok, for example, the xAI
product, it uses so much data from
the X platform, formerly Twitter,
to inform and train its chatbot — Apple doesn’t have
a social network to lean on the way Facebook might,
or that Grok or xAI I might have. So instead,
they have to rely on public data or synthetic data
that’s already generated by AI to do it. And what we’re
learning now is, yes, that kind of works,
b ut at the same time, it doesn’t make the product
as powerful. Apple just can’t be a
bystander. They can’t just look at this
and play in their own sandbox. Look at every other
big tech company. And that’s what those are:
i t’s the challenges, but also the opportunity
facing Apple, bu t developers are yearning
for Apple to be a player. At Apple’s Worldwide
Developers Conference, WWDC, in June,
it could be more about refining than reinventing. The long awaited,
smarter Siri that is context-aware, faster,
and more conversational is still in development. Key pieces might arrive in
iOS 19. That means Apple’s AI
rollout remains a work in progress. There’s going to be this
sort of extra dose of skepticism around everything
they announced related to artificial intelligence.
They kind of have to say something about AI,
t hey can’t just ignore it. But, we know that those
things that they were working on last year just
couldn’t get off the ground. So, maybe AI takes a little
bit of a backseat compared to some of the other
features they want to bring to the iPhone,
but I do expect them to still talk about Siri,
to still talk about artificial intelligence and
Apple Intelligence, t he new features through AI
that they do plan to bring to the phones in the future. Despite delays,
Apple has an edge scale. It controls more than 2
billion active devices, runs its own chip division,
and still enjoys deep user trust. You have 2.4 billion iOS
devices around the world. I recognize that Siri can be
obtuse. She can’t do what so many
other AI systems can do. In fact, she isn’t even AI,
leaving Apple open for, well, open for what? When it’s ready,
you’ll get it. And they won’t rush it out
the door just to please Wall Street. There. That’s Apple’s AI mission:
to get it right for you, n ot this street that’s
right over here. Tim Cook will have the best, they all have the best AI. Cook’s North Star is client
satisfaction, and over time,
that strategy has proven winner. The one thing that would be
a massive value-driver for Apple and Siri would be if
they managed to implement a genetic AI on-device. That would be a huge
opportunity for Apple to kind of bring some
differentiation and be the first kind of major
mainstream vendor to bring a genetic AI on-device. But competition is heating
up. In May, the lead designer of
the iPhone, Jony Ive, officially teamed
up with OpenAI to create a new AI device that could be
a potential threat to Apple. News of the partnership
caused Apple’s stock to fall. I think Apple underestimated
the AI shift. I think they underestimated
the complexity, and I think it’s really why
they had to bring OpenAI in as a partner. And I think
when you look over the last six months, I mean,
there have been mea culpa, which is pretty rare for
Apple. Apple is also expected to
shift how it announces new features, revealing them
closer to release. It’s a move that could help
manage expectations, signaling how much the
company is recalibrating in real time. This is always every year,
their big software event where they say,
“Here is how we’re going to update the software for your
iPhone, for your iPad,
for your Mac,” and so forth. Now, last year,
that’s when they debuted Apple Intelligence. And as
we know now, hindsight being 2020,
a lot of what they said just did not live up to the
promise. Apple has weathered big
transitions well in the past, from Intel to its own
chips, from iPods to iPhones. But the shift to AI is
different. You know, Apple didn’t
become the most valuable company in the world by
accident. There’s a DNA there that I
think AI they definitely underestimated, but that’s
also the opportunity that they can go after.