apple (AAPL) shares are gaining ground following reports the tech giant is exploring partnerships with leading artificial intelligence companies OpenAI and anthropic. The potential collaborations aim to power a significantly revamped version of the Siri voice assistant using advanced large language models (LLMs). This strategic move signals a notable shift for Apple, which has primarily relied on its internal “Apple Foundation Models” for AI development until now. The news, initially reported by Bloomberg, suggests a departure from apple’s historical in-house-only approach to core technologies.
Apple Plays Catch-Up in the AI Race
For some time, Apple has faced scrutiny for appearing to lag behind rivals in the rapidly advancing field of generative AI. The company’s recent Worldwide Developers Conference (WWDC) further highlighted these challenges. During the event, a highly anticipated overhaul of Siri was notably absent, with no clear explanation for the delay. Furthermore, Apple’s AI announcements at WWDC were largely seen as incremental updates rather than the groundbreaking advancements many analysts and investors hoped for. This perception of lagging has put pressure on Apple to accelerate its AI strategy.
Internal delays and setbacks have specifically hampered the development of a more advanced Siri, sometimes referred to internally as “LLM Siri.” This updated version was initially targeted for an early 2025 rollout but reportedly missed its projected March deadline. These delays are linked to internal challenges and shifts in leadership within Apple’s AI division. Responsibility for the Siri transformation project was reportedly reassigned from longtime AI chief John Giannandrea to Mike Rockwell, who previously oversaw the Vision Pro project, and software chief Craig Federighi. CEO Tim Cook is said to have initiated this change, reflecting a desire for accelerated progress in AI development.
Looking Beyond In-House: OpenAI and Anthropic in Focus
Reports indicate Apple is actively engaged in discussions with both Anthropic and OpenAI. The purpose is to potentially license their powerful Claude and ChatGPT models, respectively. A key part of these talks involves training versions of these third-party LLMs specifically on Apple’s proprietary cloud infrastructure. This allows for rigorous testing and evaluation within Apple’s ecosystem while potentially upholding some privacy principles.
While these discussions are described as being in the early stages with no final decisions made, the exploration itself is significant. It underscores Apple’s recognition that leveraging external expertise may be necessary to quickly bring competitive AI capabilities to Siri. The company has reportedly tested a variety of third-party models, including OpenAI’s ChatGPT, Google’s Gemini, and Anthropic’s Claude, during its evaluation process.
Early internal testing results suggest that Anthropic’s Claude has demonstrated particular effectiveness in handling basic user queries compared to some other models tested. This performance may explain the depth of the ongoing talks with Anthropic, although negotiations reportedly face significant financial hurdles, with Anthropic potentially seeking substantial annual fees.
This potential move towards external AI model integration marks a departure from Apple’s traditional approach. The company has reportedly even canceled its internal Swift Assist project, which was aimed at coding assistance, opting instead to potentially integrate Claude for internal developer tools. This shows a pragmatic willingness to adopt best-in-class external solutions where they can provide a faster or more effective path to delivering features.
Rivalry and Existing Integrations
Apple’s competitors have already moved ahead with integrating third-party generative AI models into their flagship devices. Samsung, for example, utilizes Google’s Gemini models to power its AI features. Amazon’s updated Alexa assistant, known as Alexa+, runs on Anthropic’s Claude technology. By considering partnerships with OpenAI or Anthropic, Apple aims to bring Siri’s capabilities on par with these rivals.
Interestingly, Apple already has a limited integration with ChatGPT within iOS 18. This allows Siri to potentially route certain web-based queries to OpenAI’s service, though it requires explicit user permission to engage with the third-party service. A deeper integration with a model like Claude would likely aim for a more streamlined and native user experience, going beyond just web search queries to power core assistant functions.
While Apple continues its own internal AI development efforts, exploring these external partnerships suggests a potential hybrid AI strategy. This approach would involve developing some AI capabilities internally while simultaneously leveraging leading external models to augment Siri’s intelligence. This shift towards potentially opening up its ecosystem to third-party AI, departing from Apple’s historically closed model, is seen as crucial for Siri to catch up and remain competitive in the rapidly evolving AI landscape.
What This Means for AAPL Stock
The news of Apple exploring these significant AI partnerships has resonated positively with investors. AAPL stock climbed on the reports, reflecting market optimism about the company’s commitment to enhancing its AI capabilities.
Wall Street analysts also view Apple’s strategic direction with optimism. On TipRanks, AAPL stock holds a Moderate Buy consensus rating. This is based on ratings from 16 Buy recommendations, nine Holds, and four Sells. The average Apple price target stands at $226.54, which implies a potential upside of 10.4% from recent trading levels. Some analysts are even more bullish, with the highest price target among 29 firms reaching $300. This ambitious forecast, representing substantial upside from current levels around $205, underscores confidence in Apple’s AI strategy and its potential impact on future growth. Successful implementation of a competitive AI solution for Siri, potentially through a partnership with a leading firm like Anthropic or OpenAI, is seen by industry experts as a key factor that could help Apple achieve such optimistic stock valuations. Despite losing 17.9% year-to-date before this recent climb, the market seems to be reacting favorably to proactive steps in the AI arena.
A successfully integrated, powerful AI could be critical for Apple to finally deliver the significant intelligence upgrade for Siri that the company has aimed for. It could also help maintain Apple’s market leadership in the face of fierce competition, balancing advanced features with the company’s commitment to user privacy through approaches like training on Apple’s cloud infrastructure.
Frequently Asked Questions
Why is Apple reportedly seeking outside help for Siri’s AI?
Apple is exploring partnerships with external AI firms like OpenAI and Anthropic due to perceived delays and challenges with its internal AI development, particularly for a new version of Siri. The company is seen by some as lagging competitors in generative AI. Internal projects aimed at upgrading Siri have reportedly faced setbacks and missed deadlines, prompting Apple to consider leveraging advanced third-party models to accelerate its progress and bring Siri’s capabilities on par with rivals like Samsung and Amazon.
Which specific AI companies is Apple reportedly talking to for Siri?
Apple is reportedly in active discussions with both OpenAI, known for ChatGPT, and Anthropic, creators of the Claude model. The company is testing versions of their large language models, potentially training them on Apple’s cloud infrastructure. While these two companies are the primary focus of current reports, Apple has reportedly evaluated other models like Google’s Gemini and briefly considered acquiring AI company Perplexity as part of its broader AI strategy exploration.
What does this potential Siri AI upgrade mean for Apple stock (AAPL)?
News of Apple exploring partnerships with leading AI firms like OpenAI and Anthropic has been met with positive investor reaction. AAPL stock saw a climb following the reports, indicating market optimism about the company’s strategic move to enhance its AI capabilities. Analysts generally view this as a positive step, crucial for Apple’s competitive position. While the stock has faced challenges year-to-date, the potential for a significantly upgraded Siri, powered by best-in-class AI, is seen by many as a key factor that could contribute to future growth and support optimistic price targets from Wall Street.
