Apple and Meta Consider Teaming Up for AI Initiatives

In its quest to keep up with advancements in artificial intelligence, Apple has engaged in discussions with its long-time rival, Meta. These conversations focus on the potential integration of Meta Platforms’ generative AI model into Apple Intelligence, Apple's newly announced AI system for iPhones and other devices.

Meta, along with other generative AI developers, aims to leverage Apple’s extensive distribution network through its iPhones, similar to the opportunities provided by the Apple App Store. As a latecomer to the generative AI field, Apple has developed its own smaller AI models but has announced its intention to collaborate with partners for more sophisticated and specialized tasks. This was highlighted at Apple’s Worldwide Developers Conference, where OpenAI’s ChatGPT was introduced as Apple Intelligence’s first partner. Craig Federighi, Apple’s software leader, emphasized ChatGPT as the best choice for users at present and expressed Apple’s interest in integrating Google’s Gemini as well.

Besides Google and Meta, AI startups like Anthropic and Perplexity are also in talks with Apple to incorporate their generative AI technologies into Apple Intelligence. If these partnerships materialize, Apple users could have the option to select from various external AI models in addition to Apple’s internal systems. The potential collaboration with Meta signifies an unexpected alliance in the AI era, illustrating the strategic shifts and collaborations among major technology companies. While OpenAI’s technology will be embedded in both Microsoft and Apple devices, a partnership between Apple and Meta would be particularly noteworthy given their historical antagonism over other technological issues.

Apple’s negotiations with AI companies have reportedly not involved financial transactions between the parties. Instead, AI companies would be able to sell premium subscriptions through Apple Intelligence, with Apple taking a share of the subscription revenue, similar to its App Store model. However, these discussions are still in progress and could potentially fall through. The financial impact of such deals remains uncertain, even though they would significantly expand the distribution of AI companies' products.

OpenAI plans to offer a free version of ChatGPT via Apple Intelligence, while users can also connect a premium ChatGPT account to their Apple devices. This partnership is expected to double ChatGPT’s usage, though it will also increase OpenAI’s infrastructure costs by 30% to 40%. Gene Munster, an Apple analyst and managing partner at Deepwater Asset Management, predicts that 10% to 20% of Apple users might opt for a premium AI subscription, potentially generating billions of dollars for AI companies that successfully integrate with Apple’s platform. Munster highlights the value of Apple’s large-scale and engaged distribution network, which is difficult to achieve otherwise.

A partnership with Meta would significantly enhance its standing in the AI industry and represent a notable reconciliation between the social media giant and Apple. Meta launched its large language model, Llama 2, in July 2023, followed by Llama 3 in April. While Llama has garnered support within the tech industry and among startups, a deal with Apple would be a substantial triumph for Meta’s CEO, Mark Zuckerberg, and the company's AI division.

The relationship between Apple and Meta has been strained for over a decade. In 2021, Apple introduced privacy changes to its mobile devices that Meta claimed would result in $10 billion in lost revenue in 2022. Moreover, Meta has encouraged advertisers to circumvent Apple’s 30% service charge for "boosted posts," a form of advertising that has been a point of contention between the two companies.

By engaging with multiple AI companies, Apple aims to avoid dependency on OpenAI. However, the extent to which Apple will make its new AI platform accessible to these external AI companies remains to be seen. Unlike the App Store, which has a streamlined process for app submissions and approvals, AI partnerships require individual agreements, complicating the integration process.

Craig Federighi stated that offering a variety of AI options makes sense as users will prefer different models for different tasks, such as creative writing or medical research. He emphasized the importance of drawing on specialized expertise that might not be part of Apple’s core offerings.

In conclusion, Apple’s strategic efforts to integrate generative AI from various partners, including Meta, represent a significant shift in the company’s approach to AI. These partnerships aim to enhance Apple Intelligence by providing users with a diverse range of AI options, leveraging Apple’s vast distribution network. While the outcomes of these discussions are still uncertain, they underscore the dynamic and competitive nature of the AI landscape, where even long-time rivals can become collaborators to advance technological innovation.