Apple's AI Crisis: Fall from Grace or Phoenix Rising?

Apple's AI Crisis: Fall from Grace or Phoenix Rising?News broke on March 3rd that Amazon's newly released Alexa+ product starkly exposed Apple's shortcomings in the artificial intelligence arena, pushing the tech giant to the brink. Some Apple AI employees predict a truly conversational LLM Siri won't arrive until iOS 20 in 2027, putting them five years behind competitors

Apple's AI Crisis: Fall from Grace or Phoenix Rising?

News broke on March 3rd that Amazon's newly released Alexa+ product starkly exposed Apple's shortcomings in the artificial intelligence arena, pushing the tech giant to the brink. Some Apple AI employees predict a truly conversational LLM Siri won't arrive until iOS 20 in 2027, putting them five years behind competitors. As the creator of revolutionary products like the Mac, iPhone, and iPad, Apple has always adhered to a "hockey stick" theory, accurately predicting technology trends. However, in this, the biggest technological revolution since the birth of the internet, Apple is virtually absent from the playing fieldthe core of its current AI crisis.

While Apple has been scrambling to catch up with the generative AI wave the technology behind advanced chatbots like ChatGPT its competitors have continued to pull ahead. Amazon's Alexa+, in particular, laid bare Apple's lagging position. In fact, Apple had the opportunity to avoid this predicament. With the launch of Siri in 2011, it held a leading position in the chatbot space. However, Siris improvements fell far short of expectations, allowing competitors to quickly overtake it.

In June 2024, Apple showcased an AI-enhanced Siri capable of more accurate responses using personal data, analyzing screen content, and controlling other functions and apps. Unfortunately, a working prototype wasn't demonstrated, and engineers faced a monumental challenge to complete development by May of the same year. From October 2024 onward, Apple rolled out an AI feature suite called "Apple Intelligence," including writing tools, voicemail transcription, "Genmoji" custom emoji generation, the ImagePlayground app (transforming photos into cartoon images), automated email sorting, and enhanced notifications. However, many of these features proved superficial, lacking practical value or even appearing pointless.

The fact is shocking: the historically most innovative company seems to have suffered a resounding defeat in the AI arena. Even Apple's attempts to integrate OpenAI's ChatGPT into its software to compensate for its shortcomings have been poorly executed. The integration feels like a rushed patch, lacking smooth conversational abilities. Apple's Visual Intelligence, while providing information about real-world objects, feels like a simplified version of Google Lens. Worse, the foundational AI featurenotification summarizationhas been disabled in some apps due to incidents of fabricated breaking news alerts. These issues severely undermined Apple Intelligence's potential to drive consumer upgrades; users have few reasons to purchase new devices for these features.

Apple is internally aware of this. While they reported to Wall Street that iPhone sales are better in regions with AI features, internal data reveals that users haven't truly embraced Apple Intelligence, with extremely low usage rates. Apple's late entry into new markets isn't unusualit didn't pioneer smartwatches, smartphones, or wireless earbuds. But Apple consistently convinces consumers to buy its products, often surpassing its competitors. Even the moderately successful mixed-reality headset, Vision Pro, is a remarkable technological feat. However, in AI, Apple is simply no match for competitors like ChatGPT, Google Gemini, and Microsoft Copilot.

Nevertheless, Apple still has a chance to compete by building fun, conversational, deeply integrated, and useful products. The June 2024 showcase positioned the new technology as "AI for the masses," suggesting a move in the right direction, but ultimately failing to deliver. Currently, Apple's AI systems lag significantly behind competitors, and this failure could be devastating. AI is becoming indispensable, altering how we interact with devices, communicate, and conduct business. When competitors demonstrate near-human conversational personalized assistants, Apple's AI-generated emoji feature pales in comparison.

Amazon's Alexa+, for instance, engages in human-like conversation and provides personalized services, essentially incorporating ChatGPT's speech patterns. It understands user background information, including social circles, interests, and home environment. After witnessing the Alexa+ launch in New York, veteran Apple analyst Mark Gurman stated it felt like reliving the thrill of ChatGPT's first demo three years prior: a game-changer. Of course, real-world performance still needs to be seen. Amazon will begin rolling out Alexa+ in a few weeks, delayed from last year due to issues with previous leadership. While its full performance remains to be seen, the outlook appears positive.

However, Apple retains one advantage: Amazon lacks the cross-platform ecosystem to enhance Alexa+'s capabilities, and doesnt have the massive native app ecosystem that Apple boasts in mobile. This, however, only makes Apple's current AI situation more disappointing. Apple could have combined its ecosystem with a cutting-edge AI system to create a powerful and unique product.

The next generation of Siri will be key to Apple's potential comeback. The software is expected to launch in May, eleven months after its initial unveiling. The current Siri in iOS 18 effectively has two "brains": one handling traditional commands like setting timers and making calls; the other tackling more complex queries, leveraging user data and maintaining smooth conversations even when users change their instructions mid-flow. To rush Apple Intelligence into iOS 18, these systems weren't fully integrated, resulting in suboptimal performance.

For iOS 19, Apple plans to merge these two systems and introduce a completely new Siri architecture. These improvements are expected to be unveiled at the Worldwide Developers Conference (WWDC) in June, with a planned release in iOS 19.4 in Spring 2026. However, the planned conversational interaction for the new system (internally called LLM Siri) has been delayed and won't appear at the June announcement. Before launching a Siri that rivals ChatGPT and Alexa+, Apple needs to refine its underlying systems a challenging task. Therefore, Apple's AI team believes a truly modern, conversational Siri won't arrive until iOS 20 in 2027.

This means Apple will be five years behind the industry in AIa more dire situation than many anticipated. Moreover, OpenAI, Google, and other competitors continue accelerating technological advancements, with countless AI startups emerging. Consider how advanced OpenAI and Google's technology might be in two years. Gurman understands that iOS 19 won't bring significant consumer-facing changes to Apple Intelligence, as Apple is still focused on polishing last year's AI features. Before pushing this year's OS updates to users, Apple will struggle to allocate resources to develop new features for the next OS. This places Apple at a critical juncture.

Clearly, Apple's internal development speed lags far behind competitors, requiring significant changes. Insiders involved in Apple's AI initiatives reveal that its foundation models and large language models (the bedrock of its AI features) are nearing their performance limits. Meanwhile, competitors are actively poaching talent, and Apple's internal leadership is perceived as inefficient in decision-making and execution. Apple still hopes for model improvements, but obtaining sufficient chip resources is a major challenge. The entire industry is vying for Nvidia's AI accelerators to train models. This might explain why Apple is increasing its in-house AI server production and pushing its chip team to develop new solutions. Multiple Apple employees state that other companies have already secured the majority of computing resources. When ChatGPT caught Apple off guard and the need for greater investment became clear, it was already too late. Furthermore, the AI industrys rapid pace means that Apple's work often becomes outdated by the time its ready for release.

This doesn't fully explain Apple's inability to deliver on already announced features. Besides Siri's slow progress and the chaotic phased rollout of Apple Intelligence, the SwiftAssist tool for AI-assisted developer programming is also significantly delayed. This was slated for release last year, while Microsoft's competing system has been deployed for years.

To address its AI challenges, Apple could emulate Samsung, Microsoft, and Amazon by leveraging external technologies to accelerate AI development. These companies have integrated Gemini, ChatGPT, and Anthropic's Claude, respectively. Apple's current ChatGPT integration is superficial; OpenAI doesn't provide the core large language model for Apple Intelligence, but rather acts as a fallback for Siri when it can't answer a question or analyze an image. To deepen integration with advanced technologies like ChatGPT, Apple could forge stronger partnerships with OpenAI and other external partners, or even explore using third-party foundation models to launch competitive AI products deeply integrated into its devices and apps, eventually replacing them with their own technology.

Regarding leadership adjustments, Apple has taken initial steps, transferring veteran software executive Kim Vorrath to the AI team to optimize Siri and related projects. Vorrath previously led software development for Vision Pro, which saw significant progress under her management. Former Google executive John Giannandrea remains at the helm of Apple's AI efforts.