In a global all-hands meeting hosted from Apple’s headquarters in Cupertino, California, CEO Tim Cook seemed to admit to what analysts and Apple enthusiasts around the world had been raising concerns about: that Apple has fallen behind competitors in the AI race. And Cook promised employees that the company will be doing everything to catch up.

“Apple must do this. Apple will do this. This is sort of ours to grab,” Cook said, according to Bloomberg, and called the AI revolution “as big or bigger” than the internet.

The meeting took place a day after Apple reported better than expected revenue in its quarterly earnings report, and that sent the company’s stock soaring. The report came in a week already marked by great tech earnings results, partially driven by AI. But unlike Meta and Microsoft, Apple’s rise in revenue was attributable to iPhone sales and not necessarily a strength in AI. 

In the earnings call following the report, Cook told investors that Apple was planning to “significantly” increase its investments in AI and was open to acquisitions to do so. He also said that the company is actively “reallocating a fair number of people to focus on AI features.”

Cook echoed those sentiments in Friday’s meeting, saying that the company will be making the necessary investments in AI to catch up to the moment.

The AI-enhanced Siri is back and allegedly better than ever

Apple has been working on integrating advanced AI into its product lineup for the past year or so under its Apple Intelligence initiative, which the company unveiled at the June 2024 Worldwide Developers Conference. The move was met by celebration and criticism even then: Apple’s big bet on AI was coming a good year or so after competitors like OpenAI, Google, Microsoft, and Meta scaled up their offerings.

Even so, the company’s progress on Apple Intelligence has been slow. Apple was supposed to unveil an AI-enhanced Siri earlier this year, and even released ads for the new iPhone with AI-enhanced Siri capabilities, but the Cupertino giant pushed that reveal back at the last minute, reportedly to next spring, though nothing is officially confirmed.

The switch-up caused major backlash from investors and customers, two major lawsuits, and a complete corporate overhaul.

Cook said on Friday that 12,000 workers were hired in the last year, with 40% of them joining research and development teams.

The leadership overhaul following the fallout of LLM Siri has “supercharged” the company’s work in AI development, senior vice president of software engineering Craig Federighi said at the meeting. 

According to Federighi, the main problem with the LLM Siri rollout was that Apple tried to build a “hybrid architecture” that utilized two different software systems. That plan has now been scratched, and Federighi seemed confident in LLM Siri’s future this time around, claiming that the new “end-to-end revamp of Siri” will now be delivering “a much bigger upgrade than we envisioned.”

Chips are center stage

Also key to the new AI strategy, according to Cook, is chip development.

Apple has been working on designing in-house AI chips for some time now, according to a Wall Street Journal report from last year, in a project internally code-named ACDC (standing for Apple Chips in Data Center). The tech giant has reportedly teamed up with Broadcom to develop its first AI chip code-named Baltra, according to a report last year in The Information, and Apple is expecting to begin mass production by 2026.

Apple’s lagging could be on-brand

Despite being a global leader in tech and a household name in consumer electronics, Apple is nowhere near the top when it comes to the AI race. 

But while that scares some Apple fans and investors, others think it’s actually kind of on-brand. Tim Cook indicated Friday that he belongs to the latter camp.

“We’ve rarely been first,” Cook said at the meeting. “There was a PC before the Mac; there was a smartphone before the iPhone; there were many tablets before the iPad; there was an MP3 player before iPod.”

Cook has a point. Apple isn’t necessarily known for spearheading new technology, but the company’s strength comes from perfecting said technology and making products that become highly dominant in their respective markets. And if Apple makes the right moves in developing and scaling its AI product offerings, Cook could potentially add AI to that list as well.