Throughout an earnings call on Thursday, Apple CEO Tim Cook replied to investors' inquiries about the iPhone maker's AI goals by claiming that DeepSeek's AI models represent "innovation that drives efficiency."
"I believe that innovation that improves efficiency is generally a positive thing. In response to an analyst's query addressing the positive effects of DeepSeek's AI models on Apple's profit margins, Cook said, "And, you know, that's what you see in that model."
Apple's AI Strategy and Partnerships
Cook continued by claiming that Apple uses a hybrid approach for its AI. It utilizes its own AI models on the specialized silicon chips in its devices to carry out a few basic functions locally. Meanwhile, collaborations with AI model supporters enable the cloud to handle additional, more complex tasks.
Cook added that Apple has always approached these types of expenses in a "prudent and deliberate" manner. There is currently only one AI relationship between Apple and OpenAI, which allows ChatGPT to respond to intricate inquiries from iPhone customers in a private cloud.
This week, OpenAI claimed to have proof that DeepSeek's AI models were trained to utilize its models using a procedure known as distillation. If accurate, this would go beyond OpenAI's instructions for use and call into question DeepSeek's achievements. After this, Apple's CEO continued to appreciate DeepSeek.
Apple has said that its cooperation with OpenAI is not exclusive. It may frequently incorporate AI models from other businesses, like Google's Gemini or Anthropic's Claude, onto the iPhone. However, Cook stopped short of recommending that Apple incorporate DeepSeek's models.
Apple's AI Challenges and Growth
Aside from OpenAI's states of IP theft, various tech analysts have claimed that DeepSeek's AI models were trained with significantly more GPUs and processing costs than the business says. This would suggest that DeepSeek's AI models were not as well-trained as previously thought. Nonetheless, the Chinese AI lab provides access to its models at a major discount compared to what American AI laboratories charge. Investors also asked Cook about the success of Apple Intelligence.
The arranged rollout of Apple's AI features does not appear to have resulted in the instant bump in iPhone sales that some expected. Instead, revenues fell slightly in the fourth quarter compared to last year.
Cook moved to spin the decline in a more positive light, stating that the business experienced higher sales in places where Apple Intelligence had been introduced than in those where it had not.
Besides the lack of availability, Apple has faced additional challenges with its AI functions. It temporarily stopped its AI summary of news articles this month despite the tool-generated misleading headlines. On one occasion, Apple Intelligence thought and altered a BBC news story to wrongly state that Luigi Mangione, the man accused of the murder of UnitedHealthcare CEO Brian Thompson, had shot himself, which was false.