According to multiple sources familiar with the matter, Apple is in advanced talks to use Alibaba’s Qwen AI models for its iPhone lineup in mainland China. The move would depart from Apple’s global strategy of using OpenAI’s GPT models for its AI features, highlighting the company’s willingness to adapt to local market conditions.

The technical edge of Qwen AI

Qwen AI is attractive to Apple in China because of the former’s proven capabilities in the open-source AI ecosystem. Recent benchmarks from Hugging Face, a leading collaborative machine-learning platform, position Qwen at the forefront of open-source large language models (LLMs).

The platform’s data shows Qwen-powered models dominating the top 10 positions in performance global rankings, demonstrating the technical maturity that Apple seeks for its AI integration.

“The selection of Qwen AI for iPhone integration would validate Alibaba’s AI capabilities,” explains Morningstar’s senior equity analyst Chelsey Lam. “This could be particularly important for Apple’s strategy to re-invigorate iPhone sales in China, where AI features have become increasingly important for smartphone users.”

Regulatory navigation and market impact

The potential partnership reflects an understanding of China’s AI regulatory landscape. While Apple’s global AI features remain unavailable in China due to regulatory requirements, partnering with Alibaba could provide a compliant pathway to introduce advanced AI capabilities.

Market reaction to the news has been notably positive:

• Alibaba’s stock surged 7.6% on Monday, followed by an additional 1.3% gain on Tuesday
• Apple shares responded with a 2.2% increase
• The tech sector has shown renewed interest in China-focused AI integration strategies

Development timeline and expectations

The timing of the potential collaboration aligns with Apple’s upcoming China developer conference in Shanghai, scheduled for March 25. Industry observers speculate the event could serve as a platform on which to announce the integration of Qwen AI features into the iPhone ecosystem.

“The partnership could change how international tech companies approach AI localisation in China,” noted a senior AI researcher at a leading Chinese university, speaking anonymously. “It’s not just about technology integration; it’s about creating a sustainable model for AI development in China’s regulatory framework.”

Implications for developers and users

For Chinese iOS developers, the potential integration of Qwen AI presents opportunity. The partnership could enable:

• Creation of locally optimised AI applications
• Enhanced natural language processing capabilities specific to Chinese users
• Seamless integration with local services and platforms

Prospects and industry impact

The effects of the partnership extend beyond immediate market concerns. As global tech companies navigate operating in China, the Apple-Alibaba collaboration could serve as a blueprint for future integration.

For Alibaba, securing Apple as a flagship partner could catalyse more partnerships with global technology companies seeking AI solutions for China. The collaboration would demonstrate Qwen AI’s capability to meet the stringent requirements of one of the world’s most demanding tech companies.

Looking ahead

While both companies maintain official silence on the partnership, the tech community awaits announcements at the upcoming Shanghai developer conference. The development is important when AI capabilities increasingly influence smartphone purchasing decisions. For Apple, success in China will impact its global growth trajectory, and integrating Qwen AI could provide the competitive edge it needs to maintain its premium market position against local manufacturers offering advanced AI features.

It underscores a broader trend in the tech industry: the growing importance of localised AI solutions in major markets.

See also: Has Huawei outsmarted Apple in the AI race?

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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Huawei’s move showcases its ability to innovate despite facing US sanctions, but it also spells uncertainty for Apple’s market share in Mainland China, one of its most crucial markets. Let’s explore why.

Apple and its AI gambit: Worth the hype?

The delay in rolling out AI features has led many industry analysts to question whether Apple’s AI push is ready for prime time. “With lots of words like ‘later this year’ and ‘early next year’, the core Apple message for iPhone 16 was: Next year will be better,” Reuters quoted Needham analyst Laura Martin.

Apple’s suite of tools, collectively known as Apple Intelligence, has been in development for some time. The company has touted the technology since its developer’s conference in June. However, the software won’t be included in the initial versions of the new iPhones, and many key features won’t arrive until next year. 

For now, the technology primarily focuses on summarising messages and notifications rather than matching the more advanced capabilities of rival systems.

Delayed AI features in iPhone 16 dampen enthusiasm–especially in China

In China, the excitement of the launch of the iPhone 16 series on Monday quickly turned to disappointment for many local Apple users when they learned that the AI features would not be immediately available in their language until next year. 

At the same time, Huawei’s AI assistant, with text summary, translation, and editing functions, and AI-boosted image editing functions, such as trimming unwanted parts of photos, will be readily available once Mate XT goes on sale later this month. This delay has prompted scepticism about the value proposition of the new iPhones in China, especially given the fierce competition from local rivals like Huawei.

“The absence of AI in China is akin to cutting one of Apple’s arms,” one commentator remarked on Weibo, China’s popular microblogging platform. Another user pointedly asked, “With the biggest selling point unavailable, shouldn’t you charge us half the price?” These sentiments reflect a growing frustration among Chinese consumers who feel they are not getting the total value of Apple’s latest innovations, according to South China Morning Post.

In contrast, Huawei’s new Mate XT, which users can fold three ways like an accordion screen door, has already received more than four million pre-orders, for which no deposit is required, according to the company’s website. According to research firm IDC, the global market for foldable phones was around 4 million units in the second quarter.

“Today, we bring you a product everyone can think of but could not make. Our team has been working hard for five years and has never given up,” Huawei executive director Richard Yu said at the launch.

On the other hand, Apple has yet to announce an AI partner in China to power Apple Intelligence. This is because the uncertain regulatory landscape in mainland China adds to the complexity of the situation. The country’s Ministry of Industry and Information Technology has approved 188 large language models for public use, none of which are from foreign companies. 

This raises questions about whether Apple’s AI features will be available in mainland China even when rolled out in other Chinese-speaking regions. Apple has stated on its website that the launch date of its AI feature in China will depend on the decision of Chinese regulators. 

But Apple has to catch up, and it has to be fast. Apple sales have been dwindling, and the company’s ranking in the world’s second-largest economy has dropped from third to sixth place. This is even though Apple has long experienced robust demand in China, where new iPhone debuts have historically caused a frenzy. 

The industry took a surprising turn when Shenzhen-based Huawei returned to the high-end smartphone sector last year with the debut of a device powered by a domestically manufactured chip. This defied US sanctions that had cut off access to the global chipset supply chain. 

The Mate 60 Pro’s debut startled analysts and US officials. In addition, Huawei started offering two-way foldable phones in its inventory, and strong sales in China helped it beat Samsung Electronics as the world’s largest vendor of such phones earlier this year. 

The delay with Apple Intelligence in China will give competitors like Huawei a window of opportunity to capture market share and establish themselves as leaders in AI-powered smartphones within their home turf. This could make it more challenging for Apple to regain ground once its AI features finally arrive in the country.

Ultimately, Apple’s AI ambitions in China represent a high-stakes gamble for the tech giant. While the company’s brand still holds significant appeal, the delayed rollout of AI features and intense competition from resurgent local players like Huawei pose serious challenges. 

As the smartphone market in China continues to evolve, Apple’s ability to adapt its AI strategy to local conditions may determine its future success in this critical market.

(Photo by James Lee)

See also: Could an Apple-Meta partnership redefine the AI landscape?

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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The Norges Bank Investment Fund, which holds considerable shares in almost 9,000 companies worldwide — accounting for 1.5% of all listed stocks — has become a trailblazer in environmental, social, and corporate governance issues. About a year ago, the fund also provided its invested companies with recommendations on integrating responsible AI to improve economic outcomes.

Several companies still have a lot of ground to cover. Specifically, when stating that “Overall, a lot of competence building needs to be done at the board level,” Smith Ihenacho clarified that this does not mean every board should have an AI specialist. Instead, boards need to collectively understand how AI matters in their business and have policies in place.

“They should know: ‘What’s our policy on AI? Are we high risk or low risk? Where does AI meet customers? Are we transparent around it?’ It’s a big-picture question they should be able to answer,” Smith Ihenacho added, highlighting the breadth of understanding required at the board level.

The fund has shared its perspective on AI with the boards of its 60 largest portfolio companies, as reported in its 2023 responsible investment report. It is particularly focused on AI use in the healthcare sector due to its substantial impact on consumers, and is closely monitoring Big Tech companies that develop AI-based products.

In its engagement with tech firms, the fund emphasises the importance of robust governance structures to manage AI-related risks. “We focus more on the governance structure,” Smith Ihenacho explained. “Is the board involved? Do you have a proper policy on AI?”

The fund’s emphasis on AI governance is particularly relevant, given that nine of the ten largest positions in its equity holdings are tech companies. Leading among them are names such as Microsoft, Apple, Amazon, and Meta Platforms. Investments in these companies contributed to a 12.5% growth in the fund’s stock portfolio in the first half of 2024. The overall exposure to the tech sector increased from 21% to 26% over the past year, now comprising a quarter of the stock portfolio. This underscores the significant role that technology and AI play in the world today.

Though the fund favours AI innovation for its potential to boost efficiency and productivity, Smith Ihenacho has emphasised the importance of responsible use. She is quoted as saying, “It is fantastic what AI may be able to do to support innovation, efficiency, and productivity… we support that.” However, she also stressed the need to be responsible in how we manage the risks.

The fund’s adoption of AI governance aligns with rising global concerns about the ethical implications and potential dangers of these technologies. AI is increasingly utilised across various sectors, from finance to healthcare, and the need for governance frameworks has never been greater. The Norwegian sovereign wealth fund maintains a standard that requires companies to develop comprehensive AI policies at the board level, fostering the adoption of responsible AI practices across its large portfolio.

This initiative by one of the world’s largest investors could have far-reaching implications for corporate governance practices globally. As companies seek to harness the power of AI while navigating its complexities, the guidance provided by influential investors like Norges Bank Investment Fund may serve as a blueprint for responsible AI implementation and governance in the corporate world.

See also: X agrees to halt use of certain EU data for AI chatbot training

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Instead of employing Nvidia’s GPUs for its artificial intelligence software infrastructure, Apple will use Google chips as the cornerstone of AI-related features and tools set to launch soon.

The fact that Apple chose to use Google’s cloud infrastructure is quite interesting because Nvidia has already captured this market, bringing Google, Amazon.com, and other cloud computing companies to 80% of the overall share. Therefore, it seems to be a smart strategic move by Apple to use an alternative source to minimise its hardware dependency.

Apple has never revealed that it is avoiding Nvidia chips in any way. However, a statement in a research paper detailing the hardware and software infrastructure powering the company’s AI tools and features is raising eyebrows. This description conspicuously lacks any reference to Nvidia chips. When asked about this, Apple chose not to respond, leaving industry analysts to make educated guesses.

According to the paper, Apple’s AI model training process leverages two distinct varieties of Google’s tensor processing units (TPUs), organised in expansive clusters of chips. When the tech giant Google prepared to build its new AI model, designed to operate on iPhones and other products offered by the company, it began deploying no fewer than 2,048 of its advanced TPUv5p chips. An even more significant part of developing the server-side for this model involved no fewer than 8,192 TPUv4 processors.

Google’s decision to use TPUs contrasts with Nvidia’s focus on GPUs, which are now practically synonymous with machine learning development. Making the choice even more interesting, Google’s TPUs are not only different by design, but also by access. Unlike Nvidia’s products – which are available independently of other providers – Google only leases TPUs through the Google Cloud Platform, forcing customers to develop their software with the help of Google’s cloud to take advantage of them.

Apple revealed this information just as it started rolling out its Apple Intelligence abilities to beta users. Currently, its developer beta program – which gives app creators an early preview of future software versions – incorporates a variety of AI-powered features. First and foremost, the use of its Writing Tools is now enhanced. Users may find an improved iteration of Siri, which now understands text as well as voice. AI alternatives can also be used for Mail and Smart Replies, thanks to email summarisation. As a bonus, beta testers can now transcribe their dictations with the assistance of AI.

Based on real-world usage and feedback, Apple will be able to improve its AI features – such as ChatGPT integration – as well as expand the functionality of Siri to interact with third-party apps. Allowing users to familiarise themselves with the AI and provide feedback, this strategy will enable the corporation to make an optimal general release in the fall.

Even though Reuters reported in June about Apple using TPU chips, the full scope of the use of Google hardware by the company would have remained unknown were it not for Monday’s detailed research. Furthermore, it is noteworthy that Apple’s engineers claimed to have the potential to develop even more significant and complex models with Google’s chips—suggesting that the current implementation is only the beginning of Apple’s AI projects.

This news comes a week after Apple held its annual developer conference in June, where the firm revealed a range of new AI capabilities, including the incorporation of OpenAI’s ChatGPT technology into the Apple software ecosystem. There was widespread euphoria in the tech space, with some seeing it as proof positive of Apple’s commitment to the future, blending ambiance with the latest technological trends.

Despite the significance of this news, Apple’s stock showed only a marginal reaction, ticking down 0.1% to $218.24 in regular trading on Monday. This muted response may indicate that investors are taking a wait-and-see approach to Apple’s AI strategy, particularly given the company’s historical tendency to enter new technological landscape deliberately, and with polished offerings.

(Photo by Medhat Dawoud)

See also: NVIDIA and Meta CEOs: Every business will ‘have an AI’

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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The report reveals that worldwide PC shipments reached 64.9 million units in Q2 2024, with Apple as the top performer among major brands. The Cupertino-based tech giant saw an impressive 20.8% increase in Mac shipments compared to last year, significantly outpacing its competitors and strengthening its position in the global PC market.

This resurgence comes as a welcome development for an industry grappling with challenges in recent years. The PC market had previously experienced seven consecutive quarters of decline, making this turnaround particularly noteworthy. While the overall market benefited from favourable comparisons to 2023, the growth was uneven across all regions. 

Notably, weak results in China continued to hold back the market’s full potential. Excluding China, the global PC market showed even more robust growth, with shipments increasing by more than 5% YoY. This disparity highlights the uneven nature of the recovery and the ongoing challenges faced in specific key markets.

Apple’s exceptional performance can be attributed to several factors, including the growing popularity of its M-series chips, which have garnered praise for their power efficiency and performance. The company’s focus on integrating its hardware and software ecosystems has also likely increased consumer interest in Mac products.

While Apple led the pack in terms of growth rate, other major manufacturers also saw positive trends. Lenovo maintained its position as the market leader with a 3.7% shipment increase, capturing 22.7% of the market share. HP Inc. followed closely with a a 21.1% market share and a 1.8% shipment growth. Acer Group also performed well, with a 13.7% increase in shipments.

Interestingly, Dell Technologies was the only top-five vendor to experience a decline, with a 2.4% decrease in shipments compared to Q2 2023. However, the company still maintained a significant 15.5% market share.

The stage is set for the AI PC revolution

Industry analysts attribute the overall market recovery to several factors, including a commercial refresh cycle and increasing interest in AI-capable PCs. Ryan Reith, group vice president with IDC’s Worldwide Device Trackers, noted that while the PC market faces challenges due to maturity and economic headwinds, the combination of two consecutive quarters of growth, market hype around AI PCs, and an ongoing commercial refresh cycle has injected new life into the mature market.

The buzz surrounding AI-enhanced PCs is expected to drive further growth in the coming months, with significant players in the industry laying out their initial strategies for AI integration. While the commercial market is seen as having the most significant short-term upside for AI in the PC industry, there is growing anticipation for developments in the consumer segment.

IDC also reckons all eyes are on Apple to potentially drive the consumer AI narrative later this year with anticipated product launches. However, “it shouldn’t be overlooked that Qualcomm, Intel, and AMD are all likely to make noise around both consumer and commercial AI PCs,” the report reads.

Beyond Apple and AI: What’s next in the global PC market?

Beyond the AI factor, the market has also benefited from promotional activities from consumer-oriented brands and channels, Jitesh Ubrani, research manager with IDC’s Worldwide Mobile Device Trackers, shared. He believes the industry has moved past the rock-bottom pricing brought about by excess inventory last year, leading to growth in average selling prices due to richer configurations and reduced discounting.

As the PC market continues recovering, it faces opportunities and challenges. The ongoing commercial refresh cycle and the emerging AI PC segment present significant growth potential. However, regional disparities, particularly the weakness in the Chinese market, remain a concern for overall market performance.

The industry will be closely watching how manufacturers capitalize on the AI trend and whether they can sustain the current growth momentum. Apple’s strong performance sets a high bar for competitors and may prompt increased innovation and marketing efforts.

(Photo by Josip Margeta)

See also: AI revolution in US education: How Chinese apps are leading the way

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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According to a Bloomberg report on July 10, citing an anonymous source familiar with the matter, Microsoft has officially communicated its withdrawal from the OpenAI board. This move comes approximately a year after the Redmond-based company made a substantial $13 billion investment in OpenAI in April 2023.

In a memo addressed to OpenAI, Microsoft stated: “Over the past eight months we have witnessed significant progress from the newly formed board and are confident in the company’s direction.” The tech giant added, “We no longer believe our limited role as an observer is necessary.”

Contrary to recent reports suggesting that Apple would secure an observer role on OpenAI’s board as part of a landmark agreement announced in June, it appears that OpenAI will now have no board observers following Microsoft’s departure.

Responding to these developments, OpenAI expressed gratitude towards Microsoft, stating, “We’re grateful to Microsoft for voicing confidence in the board and the direction of the company, and we look forward to continuing our successful partnership.”

This retreat from board involvement by major tech players occurs against a backdrop of mounting regulatory pressure. Concerns about the potential impact of big tech on AI development and industry dominance have prompted increased scrutiny from regulatory bodies worldwide.

In June, European Union regulators announced that OpenAI could face an EU antitrust investigation over its partnership with Microsoft. EU competition chief Margrethe Vestager also revealed plans for local regulators to seek additional third-party views and survey firms such as Microsoft, Google, Meta, and ByteDance’s TikTok regarding their AI partnerships.

The decision by Microsoft and Apple to step back from board positions at OpenAI could be interpreted as a strategic move to mitigate potential regulatory challenges. By maintaining a more arm’s length relationship with the AI firm, these tech giants may be attempting to avoid accusations of undue influence or control over AI development.

Alex Haffner, a competition partner at Fladgate, said:

“It is hard not to conclude that Microsoft’s decision has been heavily influenced by the ongoing competition/antitrust scrutiny of its (and other major tech players) influence over emerging AI players such as Open AI.

Microsoft scored a ‘win’ in this regard at the end of June when the EU Commission announced it was dropping its merger control probe of Microsoft and Open AI, an investigation originally announced when Open AI re-shaped its board structure at the time of Sam Altman’s on-off departure from the company.

However, the Commission confirmed it was still looking at the competitive impact of the broader arrangements between the parties and it is clear that regulators are very much focussed on the complex web of interrelationships that big tech has created with AI providers, hence the need for Microsoft and others to carefully consider how they structure these arrangements going forward.”

As AI continues to play an increasingly critical role in technological advancement and societal change, the balance between innovation, competition, and regulation remains a complex challenge for both industry players and policymakers.

The coming months will likely see continued scrutiny of AI partnerships and investments, as regulators worldwide grapple with the task of ensuring fair competition and responsible AI development.

(Photo by Andrew Neel)

See also: Nvidia: World’s most valuable company under French antitrust fire

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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The new arrangement – set to take effect later this year – will see Apple’s long-time marketing chief turned Apple Fellow, Phil Schiller, representing the company in this capacity.

According to Bloomberg, Apple’s position on the OpenAI board will mirror that of Microsoft—the AI company’s largest backer and primary technology provider.

While Schiller will be able to attend board meetings, he will not have voting power or other director privileges. However, this role will grant Apple valuable insights into OpenAI’s decision-making processes.

The partnership between Apple and OpenAI, announced at WWDC in June, will bring ChatGPT integration to iOS 18 as part of the Apple Intelligence suite of features.

Notably, this collaboration does not involve any financial exchange between the two companies. Apple reportedly views the exposure given to ChatGPT in iOS 18 as “of equal or greater value” than monetary compensation, while OpenAI benefits from the reach of Apple’s platforms.

Bloomberg’s report indicates that Schiller “hasn’t yet attended any meetings” of the OpenAI board, and “details of the situation could still change.” This cautious approach suggests that both companies are carefully navigating this new relationship.

Schiller’s appointment to this role is particularly noteworthy given his extensive experience and current responsibilities at Apple.

Since transitioning to an Apple Fellow role in 2020, Schiller has continued to lead the App Store and Apple events, reporting directly to CEO Tim Cook. He has also been at the forefront of Apple’s efforts to defend the App Store against global antitrust allegations.

By securing a seat at OpenAI’s table, even in an observer capacity, Apple positions itself to gain valuable insights into one of the leading AI research organisations.

(Photo by Daniel McCullough)

See also: EU probes Microsoft-OpenAI and Google-Samsung AI deals

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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OpenAI’s move is not surprising given the increasing geopolitical tensions and technology rivalry; however, it represents an inflection point in AI that will further turn up the heat on rather icy tech cold war. The result is massive repercussions on the future AI landscape in China and worldwide and will lay much groundwork for fierce competition among AI superpowers in the future.

In the face of increased governmental demands and rivalry for AI dominance, OpenAI’s choice protects the company’s intellectual property while navigating geopolitical difficulties. The move underscores the deepening digital divide between China and Western countries, which remains one of the defining elements in this tech war era. However, as OpenAI cuts ties with China, it also marks a bigger tech decoupling trend in which the US and Chinese tech ecosystems are pulling apart further, according to some experts.

Implications for Chinese AI players

OpenAI’s blockade presents both challenges and opportunities for Chinese AI companies. On one hand, the absence of OpenAI’s advanced models, such as GPT-4, from the Chinese market could slow the adoption and integration of cutting-edge AI technologies. This is particularly relevant for startups and smaller companies that lack the resources to develop similar models independently.

“OpenAI’s move, which is set to go into effect on July 9, could affect Chinese companies developing their services based on OpenAI’s large language models (LLMs),” a South China Morning Post report stated, citing experts. However, it can also act as a spark that propels innovation in China, driving Chinese companies even further towards producing their technologies. It could create a new AI research boom and make the Chinese landscape more energetic and self-sufficient.

On the other hand, the blockade creates a vacuum that domestic giants like Alibaba, Baidu, and Tencent are well-positioned to fill. Those companies have the financial muscle, talent, and infrastructure to accelerate their AI research and development, leading to even more active efforts by these players in AI innovation and building homegrown alternatives for OpenAI. 

Besides, the Chinese government has aggressively funded its tech industry with large investments and favorable regulations. In turn, we may see a new rush of AI research that would increase competition between domestic Chinese players and bring China in line with its overseas counterparts.

Global AI dynamics

The move by OpenAI has ramifications beyond China. The potential of this move to shift global AI dynamics is very real, and it looks increasingly likely that we could see an even more fragmented AI landscape. While the US and China are busy defining their dominance, other countries and regions may align with one side based on access to AI technologies.

This is particularly the case for Southeast Asia and African countries where China has strong economic ties – they would likely favour more Chinese AI solutions. However, European and North American states could increase their dependence on American-based AI solutions. This split could have profound implications for international consortia, data exchanges and the evolution of worldwide AI norms.

The blockade also raises crucial questions of ethics and security. In this context, OpenAI is exercising digital sovereignty—it controls who can and cannot reap the fruits of its technology. The moves are part of a broader clampdown now taking place at all levels of the AI stack to ensure such technologies are built and deployed in ways that meet decent standards and ethics, including security aspects.

This challenges China in strategically positioning its burgeoning AI sector so that other nations do not see it as threatening. Yet, as the AI race heats up, we need to put ethics inevitably and international collaboration as top priorities and for some that see China as an essential market, those companies will have to find a way to work around the complicated geopolitical hurdles.  

Apple, for instance, is reportedly seeking local partners to provide services that comply with Beijing’s stringent AI regulations, including the standards set by the China Electronic Standardisation Institute last year. After all, the future of AI hinges not only on technological advancements but also on the geopolitical strategies and policies that govern its development and deployment. 

(Photo: Jonathan Kemper)

See also: Apple is reportedly getting free ChatGPT access

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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Sources familiar with the talks have revealed that Apple has also been considering partnerships with startups Anthropic and Perplexity to integrate their generative AI technologies. This coming together of major players in the tech industry and groundbreaking startups signifies a pivotal moment in AI. 

For years, we’ve watched tech behemoths like Apple, Google, and Meta (formerly Facebook) fiercely guard their technological advancements, treating their innovations as closely held trade secrets. This approach has driven competition and spurred rapid progress but has also led to fragmentation and inefficiencies in the broader tech ecosystem.

As we embark on the next generation of AI technologies, these tech giants are starting to see that there is much more to gain from collaborating. Given their intense rivalry and divergent philosophies about user privacy and data use, the hypothetical Apple-Meta partnership is notable.

This unexpected alliance begs the question: What has changed? The answer lies in the breathtaking pace of AI advancement and the realisation that no single company can go alone in this new frontier, no matter how large or innovative. Generative AI, in particular, represents a paradigm shift in computing, fundamentally reimagining our interaction with technology. Its vast implications and numerous applications push tech giants beyond their comfort zones.

By potentially integrating Meta’s generative AI into Apple Intelligence, Apple acknowledges that hardware and traditional software expertise alone can’t secure AI leadership. Meta’s openness to sharing its AI with a competitor suggests it values widespread adoption over exclusivity.

For consumers, this collaboration promises a new era of intelligent digital interactions. Imagine an AI system that responds to your needs with unprecedented accuracy and anticipates and adapts to your preferences. This integration could transform user engagement, making technology an even more intuitive part of daily life.

Notably, Apple’s commitment to privacy adds a layer of trust to these advancements, addressing a key concern in today’s digital landscape. In short, users can expect sophisticated AI features without compromising their personal information. The inclusion of AI startups like Anthropic and Perplexity in these discussions is equally significant. 

It demonstrates that innovative ideas and cutting-edge research are not the sole domain of established tech giants in the rapidly evolving field of AI. These startups bring fresh perspectives and specialised expertise that could prove crucial in developing more advanced and ethically sound AI systems.

This open approach may drive AI development and deployment faster in places we have never seen before. Imagine Siri understanding and speaking multiple languages simultaneously with the power of Apple’s natural language processing software, Meta’s billions of users’ social interactions data, Anthropic’s AI safety lens and frankly unbeatable problem solving through Perplexity. 

This might lead to an AI assistant that is not only more powerful – is not just more advanced and capacious as a system, but also one that has depth, ethics, high fidelity model inferences about human needs.

What about ethical considerations and regulatory challenges?

The integration of powerful generative AI models into widely used platforms like Apple’s raises important ethical and regulatory questions. Issues such as data privacy, algorithmic bias, and the potential misuse of AI-generated content need careful consideration. Will this further centralise tech power among the existing few, or open new doors for startups and other smaller players? Most important of all, how do we proceed with the development and deployment of these AI systems responsibly, with built in mechanisms to safely guard against misuse?

As we attempt to do so in uncharted waters, it’s increasingly obvious that regulators and policymakers will have a major role to play in having to weigh incentives for innovation against public interests. Perhaps, it may even require creating new data sharing structures, AI governance practices and ways for companies to work together – that which reside beyond today’s antitrust and data protection laws.

See also: Mark Zuckerberg: AI will be built into all of Meta’s products

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

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From the EU’s perspective, this delay represents both a triumph and a challenge. It demonstrates the effectiveness of regulations safeguarding user privacy and promoting fair competition. The DMA and GDPR have forced tech giants to pause and reconsider their approaches, potentially leading to more user-centric and privacy-conscious products. However, this victory comes with a price: the risk of falling behind in the global AI race. 

As other regions forge ahead with less restrictive policies, the EU must carefully balance its regulatory stance with the need to foster innovation and maintain competitiveness in the global tech landscape. For Apple, this delay is likely a calculated move. The company backs the decision by citing security and privacy reasons, which helps keep up its brand profile as a reputed tech giant that cares about privacy. 

All in all, this could preserve user faith while giving Apple more time to adjust how its AI functions to be likewise compatible with EU law. But it also introduces competition and raises the risk that Apple will cede potential ground to competitors who might manage to navigate the regulatory environment faster. Nevertheless, postponing AI offerings of other tech behemoths such as Meta and Google in the EU also indicates a broader industry-wide challenge. 

Many of those companies say they need large, trained AI systems to work correctly but claim that GDPR restrictions drastically limit what they can do in practice. That begs the question: Can advanced  AI technology coexist with some of the world’s strictest data protection regulations?

Apple’s AI product would most certainly receive scrutiny compared to its competitors. The core difficulty is the data-hungry nature of modern AI systems. To provide personalised and effective services, these AIs require access to enormous datasets, which may violate GDPR principles such as data minimisation and purpose limitation.

However, Apple could have an advantage in this area. Its emphasis on on-device processing and differential privacy approaches may enable it to develop AI features more compliant with EU standards. If successful, this might establish a new norm for privacy-preserving AI, providing Apple an advantage in the European market.

And it’s not Apple’s first encounter with EU regulation. In September 2021, the company complained about parts of the DMA rules that would have forced it to allow users to sideload apps from its App Store for the first time. Apple claimed that doing so would jeopardise user privacy and security, reinforcing its long-standing belief in the sanctity of its closed ecosystem.

Furthermore, Apple’s recent move to prohibit progressive web applications (PWAs) in the EU has caused developer objections. Many saw this decision as yet another attempt to resist regulatory pressure. However, in an unexpected turn of events, the EU concluded that Apple’s treatment of PWAs did not breach DMA guidelines, prompting the company to reconsider its decision.

Global implications: Fragmentation or harmonisation?

These incidents shed light on the intricate relationship between tech companies and regulators. Companies like Apple are known for resisting regulations they perceive as too strict. However, they must also be ready to adjust their strategies when their understanding of the rules is questioned.

The EU delay of Apple’s AI features is more than a bump in the road. It illustrates the complex relationship between legal and technological innovation. Finding that balance will be vital as we go forward. Regulators and the tech industry will both need to adapt to build a world where high-powered AI is allowed to operate while also respecting human rights and privacy.

It is a reminder that there are no clear courses to follow in the constantly changing world of AI. Governments, in turn, will need to be ready for fresh thinking and creative formulation if we want the powers of AI brought to the good in ways that are true to the values and rights on which our digital society rests.

However, the timing of the controversy raises questions about the future of global tech development. Will the digital landscape continue to fragment, with different functionalities available in other geographies based on what is permissible by that jurisdiction’s regulations? Or is it the direction of a more harmonised global approach to tech regulation and development?

As consumers, we find ourselves in a constant struggle between the forces of innovation and regulation. As technology advances, we are eager to embrace the newest AI-powered features that enhance our digital experiences and cater to our individual needs. However, it is equally important to us to prioritise protecting our privacy and data. 

Companies such as Apple face the challenge of pushing the boundaries of what is possible with AI and establishing new benchmarks for privacy and security. To sum up, Apple’s decision to delay its AI features in the EU is a major story in the continuing discussion of tech innovation and regulation. It highlights the need for a more sophisticated and collaborative strategy to form our digital future. 

As we go down this path, it will be all the more important to have open and constructive conversations with all stakeholders—tech firms, regulators, users—to come up with solutions that promote innovation while safeguarding basic rights. Indeed, the future of AI fundamentally in Europe and on a global scale might be at stake as we struggle through these stormy seas.

(Image Credit: Apple)

See also: Musk ends OpenAI lawsuit while slamming Apple’s ChatGPT plans

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According to a Bloomberg report by Mark Gurman, “Apple isn’t paying OpenAI as part of the partnership.”

Instead, the Cupertino-based company is leveraging its massive user base and device ecosystem as currency.

“Apple believes pushing OpenAI’s brand and technology to hundreds of millions of its devices is of equal or greater value than monetary payments,” Gurman’s sources explained.

Gurman notes that OpenAI could find a silver lining by encouraging Apple users to subscribe to ChatGPT Plus, priced at $20 per month. If subscribers sign up through Apple devices, the iPhone maker will likely even claim a commission.

Apple’s AI strategy extends beyond OpenAI. The company is reportedly in talks to offer Google’s Gemini chatbot as an additional option later this year, signalling its intent to provide users with diverse AI experiences without necessarily having to make such major investments itself.

The long-term vision for Apple involves capturing a slice of the revenue generated from monetising chatbot results on its operating systems. This move anticipates a shift in user behaviour, with more people relying on AI assistants rather than traditional search engines like Google.

While Apple’s AI plans are ambitious, challenges remain. The report highlights that the company has yet to secure a deal with a local Chinese provider for chatbot features, though discussions with local firms like Baidu and Alibaba are underway. Initially, Apple Intelligence will be limited to US English, with expanded language support planned for the following year.

The Apple-OpenAI deal represents a novel approach to collaboration in the AI space, where brand exposure and technological integration are valued as much as, if not more than, direct financial compensation.

See also: Musk ends OpenAI lawsuit while slamming Apple’s ChatGPT plans

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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Musk had initially sued OpenAI in March 2024, alleging breach of contracts, unfair business practices, and failure in fiduciary duty. He claimed that his contributions to the company were made “in exchange for and in reliance on promises that those assets were irrevocably dedicated to building AI for public benefit, with only safety as a countervailing concern.”

The lawsuit sought remedies for “breach of contract, promissory estoppel, breach of fiduciary duty, unfair business practices, and accounting,” as well as specific performance, restitution, and damages.

However, Musk’s filings to withdraw the case provided no explanation for abandoning the lawsuit. OpenAI had previously called Musk’s claims “incoherent” and that his inability to produce a contract made his breach claims difficult to prove, stating that documents provided by Musk “contradict his allegations as to the alleged terms of the agreement.”

The withdrawal of the lawsuit comes at a time when Musk is strongly opposing Apple’s plans to integrate ChatGPT into its operating systems.

During Apple’s keynote event announcing Apple Intelligence for iOS 18, iPadOS 18, and macOS Sequoia, Musk threatened to ban Apple devices from his companies, calling the integration “an unacceptable security violation.”

Despite assurances from Apple and OpenAI that user data would only be shared with explicit consent and that interactions would be secure, Musk questioned Apple’s ability to ensure data security, stating, “Apple has no clue what’s actually going on once they hand your data over to OpenAI. They’re selling you down the river.”

Since bringing the lawsuit against OpenAI, Musk has also created his own AI company, xAI, and secured over $6 billion in funding for his plans to advance the Grok chatbot on his social network, X.

While Musk’s reasoning for dropping the OpenAI lawsuit remains unclear, his actions suggest a potential shift in focus towards advancing his own AI endeavours while continuing to vocalise his criticism of OpenAI through social media rather than the courts.

See also: DuckDuckGo releases portal giving private access to AI models

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

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