Apple's AI Brain Bleed
Picture this: Mark Zuckerberg is with his boys walking by the Blue Bottle in Cupertino. He notices Tim Cook inside with a group of Apple employees. He goes over and knocks on the window to get Tim's attention. Zuck shouts through the window, "do you like apples?" Tim nods, "yeah." Zuck pulls out a napkin with the name 'Ke Yang' written on it and slams it against the window. "Well I got your AI guy. How you like them apples?"
This scene popped into my head upon reading the news that Meta has poached one of Apple's key AI employees. I'm sorry, I should be more specific, because this has happened about a dozen times now. Here's Mark Gurman with the report for Bloomberg:
The Apple Inc. executive leading an effort to develop AI-driven web search is stepping down, marking the latest in a string of high-profile exits from the company’s artificial intelligence division.
The executive, Ke Yang, is leaving for Meta Platforms Inc., according to people with knowledge of the matter. Just weeks ago, he was appointed head of a team called Answers, Knowledge and Information, or AKI. The group is developing features to make the Siri voice assistant more ChatGPT-like by adding the ability to pull information from the web.
I honestly go back and forth about how important or unimportant it is that Apple is far behind in the AI race right now. After all, it's clearly still early with so many pieces moving insanely fast. Certainly there's a school of thought that Apple should simply sit back and wait while OpenAI, Anthropic, Google, Meta and everyone else battle with their cash cannons to see how it all shakes out. But the other reality here may be that the field is moving so fast and is so vital to the future of well, everything, that Apple may never be able to catch up in technology that ends up being core to everything they do.
As always, the reality is probably somewhere in between, but I tend to lean towards the notion that Apple is playing with fire here simply because the only way they're going to be able to enter the space, even later, is with the right talent around the table. And, well, they clearly can't keep the talent around the table! And the reason they can't is clearly because they've so badly bungled their AI initiatives to date. So it's sort of this doom loop in which Apple finds itself – seemingly just months from having to ship the new Siri. And they can't afford to fuck it up this time because they already did that once. So... this is not a great look nor situation.
Speaking of "afford", Zuck must smell Apple's weakness here. And of all the current Big Tech rivalries (so, Elon Musk and Sam Altman aside), clearly Meta hates Apple more than anyone else. Zuck obviously feels like Cook screwed him on the ATT stuff back in the day, but even post-recovery, the situation remains that Meta is completely beholden to Apple on many fronts because they control the devices on which Meta's products are used. From their social networks to their smart glasses. He's trying like hell to change that, but it's going to take years, maybe decades, if it ever works. And so Zuck is shifting the battlefield to one he can control.
While Zuck has struggled to get some of the top AI talent in the world to accept his "Godfather" offers – seemingly mainly because many are more mission-oriented around AI and Meta is well, Meta – he keeps upping the ante. God knows what he paid to finally convince Andrew Tulloch to turn his back on Thinking Machines Lab, but it clearly starts with a "b" and ends with an "s". So yeah, Zuck is willing to do whatever it takes to try to win here. And it's perhaps not completely irrational when you consider how much all of these companies are spending on AI infrastructure. What good is all of that if you don't have the talent to utilize it? That doesn't make all of this any less insane.
But the one company not spending hundreds of billions on AI servers? The company Meta is clearly having no problem poaching from. Low-hanging fruit, as it were. And it has the added benefit of screwing over Apple at a critical time. For Zuck, it's a type of payback that money can't buy. Well, technically it can. And has.
Apple is in real trouble here. Again, not because they need to be full-on in the AI race right now. But because they keep losing all the people that will allow them to enter it at some point. That alone may make the case for making a massive acquisition. Is, say, $100B too much to pay for a talent acquisition? I mean, undoubtedly not for Zuck!
The problem is that even if they did pull such a trigger, Apple would still have to retain that talent. And they have not proven adept at doing that! Beyond the money – they would clearly need to pay these people tens of millions or perhaps hundreds of millions (in stock at least) to retain them. But just as vital would be putting a world-class team and game plan around them, so they're not tempted by Zuck's billions. Only really Anthropic has a proven ability to do that thus far.
Meanwhile, Apple's historic strength: a culture that values consistency, secrecy, scarcity, and yes, longevity, may not be a culture best suited to compete in AI. Clearly.
While I like what I think is Apple's general game plan at the moment, to retreat to their strength in hardware, as Apple has told everyone for decades: it's hardware plus software that's the key to making the devices sing. And if AI is the key to future software... Well, they need to be there at some point. And it's not just hard to do that without the right talent, it's impossible.
How do you like them apples, Apple?
M.G. Siegler
M.G. Siegler
M.G. Siegler