When Tim Cook was asked about the Chinese AI firm DeepSeek during today’s investor conference, he explained that the disruptive new model represents a positive development in the iPhone maker’s business.
Melius analyst Ben Reitzes asked how Apple views the arrival of DeepSeek. DeepSeek is a reduction in the costs of developing advanced AI models and running these models.
Hey, Tim. I wanted to ask, you knew that this was coming but there is a perception that you are a big beneficiary. I was wondering if your worldly perspective has changed in regards to the tailwind for margin and your ability execute, even if the cost could come down because of that development. I love your view on that. Cook acknowledged the innovation DeepSeek had shown in reducing the cost of running and training their V3 model. This is the reasoning model R1 that competes against ChatGPT.
I believe that our tight integration of software and silicon will continue to benefit us. As you may know, we perform certain tasks on the device, and others in the private cloud. This mimics, from an architectural perspective, what is done on the device.
From a CapEx perspective, we’ve always been very careful and deliberate about our expenditures, and we continue to leverage the hybrid model, which, I believe, continues to serve us.
This hybrid model, which builds out Apple Intelligence and integrates with OpenAI’s ChatGPT has been praised by many this week. Apple is not seen as investing too much in AI, now that the costs of development and operations should be decreasing. Apple’s AI efforts will not be slowed down, but the pressure is off for now. Read our 9to5Neural explanation on DeepSeek and how it’s changing the American AI landscape.
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