Who really wins from Apple Intelligence? (2024)

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• Strong ARMing Apple’s silicon

• Bricked!

• Yelling at weddings

If that’s enough to get the silicon chipping, read on…

Apple Intelligence, it’s all anyone can talk about this week.

Nvidia who?

Goog-WHAT?

ChatGPT… oh ChatGPT yeah, well, more on that in a moment.

But as I sort of previewed for you on Tuesday, Apple’s WWDC24 (Worldwide Developers Conference 2024) kicked off on Tuesday.

And boy did it make a splash!

From one of the most awesome calculator applications the world has ever seen to (as correctly predicted) Siri getting a MAJOR upgrade, it looks like Apple has finally entered the AI race…

Sort of.

Firstly, (also correctly predicted) the conference had a massive impact on Apple’s stock price.

Apple was up 7.26% – around $220 billion in market cap from the big event.

The hype and excitement around the event were palpable.

I should know, I put my boys to bed, let the dog out for a wee, poured myself a co*ke Zero (where an accidental shot of rum fell into it 🤷) and then opened up the AppleTV+ app on my TV and embraced the Apple cultism in all its full glory.

It was pretty cool, and if the way Apple presented the new Siri lives up to the reality of how it will be for everyday use, then we are finally getting past this early teething stage of great AI, but dumb AI.

And as I’ve said before, AI will form that backbone of your daily organisation just in the background, where you don’t really need to know about it, you just do.

Again, this was all great stuff…

Sort of.

The thing is that Apple’s foray into AI isn’t really Apple. Nah, it’s not sorry.

It’s OpenAI via ChatGPT, which you can also read as Microsoft.

Apple’s core “Intelligence” features are all powered by OpenAI technology.

Yes, you hear correct – a $3 trillion company deeply rooted in tech has outsourced its latest cutting-edge tech.

Frankly I don’t think it matters that much. It seems like a win/win for Apple and for OpenAI *cough* Microsoft.

But therein lies the story I don’t think is being told, at least not yet, but one you should probably pay more attention to.

You see Apple Intelligence looks great, but it’s only possible as Apple repeatedly said via “Apple silicon”.

So what is Apple silicon? Apple Intelligence will only be available through devices that run the following Apple silicon.

That’s the A17 Pro, M1, M2, M3, M4 chips, and I expect any silicon it releases in the future.

That’s great, but what is Apple silicon? Let me try to break it down for you…

The Apple M series chips, including the M1, M1 Pro, M1 Max, M1 Ultra and M2, are Apple's “custom” silicon designed specifically for its Macs and iPads.

These chips are thanks to detailed engineering from Apple's in-house teams but they also very much rely on ARM architecture and advanced manufacturing processes from TSMC.

Apple’s M series chips are based on ARM (NASDAQ:ARM) architecture, specifically ARMv8 and ARMv9. ARM provides the architecture and design blueprints for these processors that are widely recognised for their high efficiency and low power consumption.

That makes them ideal for devices like iPads, iPhones, and compact devices like Macs and MacBook.

Apple licenses the ARM architecture and that’s when it takes it in-house, and designs its own custom CPU and GPU cores based off ARM tech. This means that while Apple uses ARM's architecture as a starting point, the final design and performance characteristics of the M series chips are unique to Apple.

So yeah, it’s “Apple silicon” but it’s very much ARM under the hood too.

Then once Apple has sprinkled its magic dust over things, it’s off to Taiwan Semiconductor (NYSE:TSM) to make the things.

Apple partners with TSMC to manufacture its M series chips. TSMC is the world’s leading semiconductor foundry, known for its cutting-edge fabrication technologies.

This all means that Apple will get the plaudits for its silicon-running “Intelligence” but without ARM and TSMC, quite possibly we’d have none of this at all.

We’ve seen just how much of a bump that Apple’s stock price got from WWDC24 and the announcement of Apple Intelligence.

But long term, when you think about how Intelligence works and the companies crucial to Apple’s silicon, I think maybe they’re both worth greater consideration for investors.

AI gone wild 🤪

AI has bricked my computer!

If that makes no sense to you, let Urban Dictionary assist:

My computer is decent. It’s a Mac Mini, 3 GHz 6-Core Intel i5 processor, with an Intel UHD 630 153MB graphics processor. I’ve got 8 GB of DDR4 memory.

So, it’s not a powerhouse for full-range video editing or graphic design. But for Word processing and researching a lot of stuff online it should be more than fine.

And it is… Well, it was until more recently.

If I look at my open windows as I type right now I have the following applications open.

Word, Outlook, Slack, Chrome (eight tabs), WhatsApp and Signal. Nothing out of the ordinary there. In the background, Dropbox is running too, and a couple of peripheral devices – nothing too strenuous either.

The problem is, this all used to be fine. And then all of these things started to integrate AI into their applications. And that too is fine, and a natural progression of technology.

Except now my little Mac Mini battles harder to get stuff done than it ever has before. I’ve not changed what I use or how I use it, but everything else has decided to AI-up and my tech is simply struggling to keep up.

There are times when it literally just stops doing anything and just tries its best to catch up.

I think it’s soon destined to join the pile with my other Apple devices – an old MacBook Pro and Macbook Air that eventually lost the silicon power to keep up with how our digital world works.

I just spoke about how Apple Intelligence requires the M-series family of Apple silicon.

I do not have that in my Mini.

Luckily the iPad I recently bought for my wife prior to Apple’s AI announcement does have M-series chips in it. Phew!

But very quickly my Mac Mini will be simply unable to do anything.

My Dropbox app has already integrated AI. Monday.com – a workflow platform we use at Southbank Investment Research – has integrated AI. When I make a Zoom call, AI is integrated to take meeting notes. Slack has AI integrated into it. CoPilot is now amongst all the Microsoft apps.

AI is already everywhere and any old silicon, older GPUs, simply can’t keep up. I will soon have no choice but to upgrade just to ensure I can say functional.

I expect you will have to do the same, whether you like it or not. And again, that’s great for Apple and Microsoft, but I think we also need to look deeper under the hood. As mentioned above with ARM and TSMC. But there’s also the memory makers, the cooling technologies, the cabling and power providers.

This is where the growth in AI comes from. Load me up with RAM and load me up with RAM stocks… that’s the direction I think we need to keep looking just so we don’t all end up with bricked devices.

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• Wearable Devices (NASDAQ:WLDS) up 38%

• Quantgate Systems (OTCPK:QGSI) up 37%

• Taiwan Semi (NYSE:TSM) up 8%

Bust 📉

• Vicarious Surgical (NASDAQ:RBOT) down 18%

• Amesite (NASDAQ:AMST) down 10%

• Gorilla Technology (NASDAQ:GRRR) down 38%

From the hive mind 🧠

• This isn’t really AI, but considering the doom and gloom that sometimes surrounds AI, it’s fair to say you have to remember than humans are capable of creating incredible things, doing incredible things and that most likely all this AI stuff will lead to incredible things. This video is a reminder, that people can and should be happy. Thereby I challenge anyone to watch this and not feel a little happy about things.

• Here comes more silly money valuations for AI companies. And what would you know, but Microsoft already has their sticky fingers in this pie too.

• Apple, Google, Microsoft, Meta, Nvidia, big names in AI. But by no means the only ones. Just cast the eye a little further down the market cap tables and you’ll see some oldie-but-goodie names in there too that are making cash hand over fist thanks to AI…like this old stalwart.

On Tuesday I asked if you wanted more or less video and the results are in…

More than enough to make it a more common thing than not.

Of course I can’t please everyone, so it won’t be in every single edition of AI Collision 💥.

But I will do more, and they’ll be short, around five minutes, for the things I think you probably need to hear from me as well as read from me too.

If you have any topics you want me to talk about too, feel free to share and I can add that into the mix.

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AI Collision

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