Apple entered discussions with Google to host an upcoming version of Siri on Google's data center servers with strict privacy standards, potentially moving away from its original plans to host the Gemini models on its own infrastructure. The arrangement would further deepen Apple's reliance on Google, which already provides cloud capacity for iCloud storage and the training of Apple's in-house AI models.
Former Apple employees told The Information that the company has historically mismanaged its cloud infrastructure and that only 10% of Apple's Private Cloud compute capacity is in use on average, with some servers still sitting in warehouses uninstalled.
Although various leaders at the company have attempted to build up its internal infrastructure to reduce reliance on Google Cloud and Amazon Web Services, those efforts have been unable to get past finance executives, who look at cloud computing as a cost center rather than an investment. Sources said that Apple's resistance to making big investments in its own infrastructure has led to ongoing departures of cloud experts from the company.
Personally I don't blame Apple for not aggressively investing in cloud infrastructure right now, as they'll probably be able to buy it for pennies on the dollar in a few years from bankrupt AI startups and/or cheaper alternatives that flood the market. No need to pay Nvidia's $4 trillion market cap prices for chips.
I'm also not convinced that Apple has given up on AI or that it will indefinitely depend on third-party providers like Google or OpenAI to power Siri.
A few months ago, Jeremy Kahn and Beatrice Nolan of Fortune said it well:
“Apple defenders note that the company is rarely a first mover in new technology. It was not the first to create an MP3 player, a smartphone, wireless earphones, or a smartwatch, yet it came from behind to dominate many of those product categories with a combination of design innovation and savvy marketing. And Apple has a history of learning from partners for key technology, such as chips, before ultimately bringing these efforts in-house. Or, in the case of internet search, Apple simply partnered with Google for the long term, using the Google engine to handle search queries in its Safari browser. The fact that Apple never developed its own search engine has not hurt its growth. Could the same principle hold true for AI?”
Time will tell. In the meantime, “Hey Google”… Oops, I mean, “Hey Siri.”
