Apple and Google Stumbling While Microsoft Surges Ahead in AI (2024)

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Apple and Google Stumbling While Microsoft Surges Ahead in AI? ›

While Google dawdled with AI experimentation, Microsoft forged ahead and beat them to market with powerful generative AI models that could reshape how we interact with computers. The AI battle is still in its early innings, but the scoreboard right now favors Microsoft's bold plays.

Insufficient AI chips limited Apple's efforts

It also didn't help that Apple didn't manage to buy enough AI processors.

Cultural clashes and limited resources hinder AI progress. Despite being an early mover in the artificial intelligence space with the introduction of Siri in 2011, Apple has fallen behind its competitors in the AI arms race, according to a report by The Wall Street Journal.

Apple struggles to keep up with AI advancements

Competitors like Huawei have been integrating AI features for months, and Apple's offerings—though now available—lack crucial support for local languages in China, a significant disadvantage in such a competitive market.

The introduction of Google AI has led to a shift in how ranking factors are evaluated and prioritized. Traditional SEO practices focused on keyword optimization, backlink quality, and other on-page and off-page factors.

Apple's caution and characteristic secrecy, as well as the care it takes in upgrading devices—where hardware and software are seamlessly integrated—have hobbled its early efforts in the AI arena, the people said. It now finds itself in the unusual position of having to take risks.

Apple did not say when it would move beyond the test phase, nor did it announce a partner in China to help power its AI ambitions. The lack of AI features in the new iPhones drew scorn in China, where the government has mandated that generative AI-based chatbots need to be vetted before their public release.

With shares having risen to US$236.30, Apple now has a market value of US$3.62tn - the highest currently in the world. According to analysts at Morgan Stanley, this is a direct consequence of AI boosting iPhone and iPad shipments.

Weak AI refers to narrow systems that excel at specific tasks within limited contexts, but lack generalized intelligence and adaptability outside their domain. Today's AI is considered weak — even powerful chatbots still fail basic comprehension tests, and algorithms falter in unfamiliar environments.

Apple's ability to integrate AI capabilities quietly but effectively into its devices over the years has given it a significant edge over Microsoft, which is now trying to catch up with its Copilot+ initiative.

Why did Apple fall so much? ›

Apple's List Of Woes. Meanwhile, several issues are weighing on Apple stock including weak iPhone sales in China and the U.S. and legal problems over its App Store policies in Europe. On June 24, European Union regulators accused Apple of violating the EU's Digital Markets Act with its App Store policies.

Apple's decision to limit Apple Intelligence to high-end models is driven by the significant cost and infrastructure challenges associated with deploying AI at scale, allowing the company to ensure a smooth and secure user experience while laying the groundwork for future expansions.

According to the Google spokesperson, in many cases when AI Overviews returns incorrect answers it's because there's not a lot of high-quality information available on the web to show for the query—or because the query most closely matches satirical sites or joke posts.

Niche content will see traditional search engines continue to thrive. In the future, there is a third key reason why AI won't replace traditional search engines. This is because AI will be great at collating the best overall information as it's intended to advise the many, not the few.

Former Google CEO Eric Schmidt has blamed the search giant's lagging performance in the artificial intelligence race to its prioritisation of remote work and work-life balance over competitive drive.

Once dominating the technology world, Apple is now under attack from many sides. Demand from Chinese customers is slowing down, the App Store is facing a wave of criticism from European regulators, and recently its business operations have struggled, causing Apple's valuation to be affected.

Newton's eureka moment when he witnessed an apple falling to the ground not only led to a scientific breakthrough which would define the laws of gravity, but also marked the start of a universal journey for one apple tree.

Apple Intelligence, the company's AI software, will be used to improve Siri as well as enhancing features such as understanding and identifying objects captured by the phone camera, executives said. A test version of Apple Intelligence will be available in the U.S. version of the English language next month.