Apple’s Future in an AI-Powered World: Experts Weigh In

Since mid-2023, Microsoft and Apple have been competing for the title of the world’s most valuable company. Microsoft briefly surpassed Apple that year, but the two companies have been ping-ponging between first and second place ever since. While being in second place is still impressive, industry analysts believe that Apple may struggle to take on the top AI-focused companies. Currently, Saudi Aramco and Alphabet (Google) are the nearest competitors, but they trail by nearly a trillion dollars.

Both Microsoft and Nvidia have seen growth above the average of the S&P 500 in 2024. Microsoft’s stocks have increased by 7% and Nvidia’s by over 10% this year, compared to the S&P 500’s 2.5% performance. In 2023, both companies reached record highs, with Nvidia being the top performer overall. In contrast, Apple’s stock has remained stagnant in the first month of 2024. Experts predict a strong first quarter for Nvidia and Microsoft, with expectations of continued success throughout the year. This optimism is based on the belief that there will be increasing interest in generative AI products and services.

Microsoft’s rise in the AI industry can be attributed to its investments in OpenAI, a leading generative AI company. Nvidia’s growth has also been fueled by their dominance in providing hardware for generative AI labs. Apple’s profits in 2023 heavily relied on iPhone sales. With growing competition from Huawei in China and a decline in consumer interest in voice assistant technologies like Siri, Apple’s growth may be restricted in 2024. If Apple falls behind its AI-first competitors, such as Alphabet, Amazon, Meta, Nvidia, and Tesla, the company may need another breakthrough moment, similar to the success of the iPhone, to regain its position at the top.

It is important to note that Apple already has a strong user base with the iPhone. There are rumors that the company is secretly working on its own generative AI systems and plans to enhance Siri to compete with other AI models like ChatGPT. A recent report suggests that Apple is testing ChatGPT and other AI systems in the latest iOS 17.4 beta. This indicates that Apple may be benchmarking its own AI system, codenamed “Ajax,” against existing models. If Apple can bridge the gap between Siri’s capabilities and the capabilities of advanced AI models like GPT4, it could create another significant moment for the company.

Generative AI has been a growing trend for companies involved in its development. No company has yet found a breakthrough consumer-level application or hardware for this technology. For the billions of iPhone users worldwide, this potential breakthrough could already be in their pockets.