The Rundown - Deep Dive: Apple's Internal AI Drama

Episode Date: May 25, 2025

Apple has been struggling to launch new AI features on the iPhone, and recent reports have shown that corporate drama may be the reason why. In this episode we explore what's happening behind the scenes at Apple HQ and how big tech players may overtake the smartphone king with new "iPhone killer" projects. The content of the video is for general and informational purposes only. All views presented in this show reflect the opinions of the guest and the host. You should not take a mention of any asset, be it cryptocurrency or a publicly traded security as a recommendation to buy, sell or hold that cryptocurrency or security. Guests and hosts are not affiliated with or endorsed by Public Holdings or its subsidiaries. You should make your own financial and investment decisions or consult respective professionals. Full disclosures are in the channel description. Learn more at Public.com/disclosures.Past performance is not a guarantee of future results. There is a possibility of loss with any investment. Historical or hypothetical performance results, if mentioned, are presented for illustrative purposes only. Do not infer or assume that any securities, sectors or markets described in the videos were or will be profitable. Any statements of future expectations and other forward-looking statements are strictly based on the current views, opinion, or assumptions of the person presenting them, and should not be taken as an indicator of performance nor should be relied upon as an investment advice.

Welcome back to the rundown for another weekend deep dive. Today, we are talking about Apple and their struggles with AI. The company's AI tech is constantly delayed and they're lagging behind their competition like Google, which just flexed their AI muscle at their I.O. Conference this week. And now they're facing competitive threats from OpenAI who just partnered with the designer of the iPhone to build the potential iPhone killer. So in today's episode, we're talking about Apple's AI mess.

the delays, the internal drama, and the trillion-dollar question, can Apple catch up before they turn into the next BlackBerry? We got a great show for you today. Let's go. Now, before we get into Apple's current AI mess, I think we should rewind the clock back to 2011. Believe it or not, there was a time when Apple looked like it had a head start in AI. That's when they launched Siri.

And at the time, Siri was groundbreaking technology. It was the first major voice assistant built into a smartphone. This is before Alexa, before Google Assistant. In fact, Steve Jobs was obsessed with Siri. According to an incredible Bloomberg report, Jobs believed that Siri was going to be the future of computing. In fact, he was so convinced that he called the founder of Siri for 24 days in a row to convince him to sell the company to Apple. And that eventually worked. Apple bought Siri back in 2010, and Steve Jobs made Siri one of Apple's top priorities and launched it with the iPhone 4S in 2011.

But unfortunately, Steve Jobs passed away just days after Siri was launched in October of 2011. And with him gone, Siri never got the internal support or investment it needed to evolve. You fast forward to today, and I mean, let's be honest, Siri is a punchline. I think even most diehard Apple fanboys would agree that it's pretty much useless. Meanwhile, Amazon and Google launched their own voice assistant shortly after Siri. Amazon Alexa came out in 2014 and Google Assistant came out in 2016. And look, I'm not going to sit here and say that Alexa and Google Assistant are incredible. They can be hit or miss, but they're still way better than Siri.

So Apple saw that and in 2018, Apple made a big move to fix the problem. They brought in a former AI guru from Google, someone who Apple thought was going to turn them into an AI power. Well, instead, it led to even more internal drama and Apple missing the boat after chat GPT. All right, so let's talk about some of the drama inside Apple because it turns out that it's not just a tech problem they're having. They're having a people problem too. Back in 2018, Apple made what looked like a power move. They hired a guy named John Gin and Dreham. He was Google's former head of AI and he was coming into Apple to be their VP of machine learning and AI strategy.

That's a pretty big title. He was going to report directly to Tim Cook. And this was supposed to be Apple's big AI glowup, their solution to the Siri problem. Because Jin Andrea had a pretty stacked resume. He was the guy who helped integrate AI into Gmail, Google Photos, and Google Translate. This was supposed to be like Kevin Durant joining the 2016 Warriors, a game-changing acquisition that was supposed to make Siri actually useful and turn Apple into an AI powerhouse and leaving their competition in the dust. Well, it didn't exactly work out that way. In fact, many people inside Apple are now saying that Jan Andrea is the big reason why Apple missed the boat after the launch of ChatGPT.

See, when Chad GPT dropped in late 2022, it kicked off an AI arms race and every major tech company went into full-on sprint mode. Microsoft, Google, Amazon, Meta, they all started investing billions of dollars in data centers and scooping up Nvidia chips and launching new frontier AI models. Apple, on the other hand, showed no signs of arms. urgency. They were chilling. Now, from all the reporting that I've seen, I think there's plenty of blame pie to go around. First off, you have Craig Federigi, Apple's head of software. Great head of hair. He's the guy that always has this top button unbuttoned. And he wasn't convinced that Apple should be spending billions of dollars investing in AI like everybody else was. And then when Apple did decide to jump in, Apple's CFO at the time, Luca Maestri, didn't buy

enough Nvidia GPUs, which meant that Apple's AI models took longer to train. But the biggest chunk of blame is landing on John Jean-Indrea. People say that he should have pushed back hard on Apple's slow response to AI. Because, you know, he was the AI expert. He should have been pounding the table at Cupertino telling Apple's leadership that they needed to go all in. But instead, he held back. In fact, get this, he reportedly wasn't even a big fan of the chat box concept.

He didn't think that people would want to talk to AI that way. I think it's safe to say that he was wrong about that because I think I talked to chat, CPP, more than I talk to my wife these days. Now, beyond just the technical missteps, there are also cultural issues as well. Jinendraa wasn't a good mix with the rest of Apple's leadership, and his team reportedly didn't operate with the same level of urgency as other divisions inside of Apple. And I think that lack of urgency explains why Apple intelligence is so bad. You know, all the features that Apple hyped up over the last year or so in their marketing,

many of them haven't shipped. I mean, Siri is still barely usable these days. Meanwhile, you have companies like OpenAI and Google who are dropping, mind-blowing voice assistance. Like, if you haven't used chat GPT or Gemini's voice features yet, they are incredibly good. Now, Apple is supposedly building up Siri from the ground up and infusing it with their AI.

It was supposed to launch this April. Then they delayed it to May. Well, now it's been delayed indefinitely. Tim Cook actually talked about that on the earnings call back on May 1st. He said that Apple needed more time to meet their high-quality bar. But you can tell that Tim Cook is starting to get frustrated now because this year he officially demoted Jin Andrea, stripping him of all the controls that he had over product development,

including Siri. Siri is now in the hands of Mike Rockwell. He's the guy who led the development of the Apple Vision Pro VR project, not exactly a smash commercial hit. But hey, at least it was innovative, right? And Tim Cook is hoping that Rockwell can bring that same spark and innovation to Siri. Also, Craig Federigi is now going to be more involved with Apple's AI Roadmap 2, which just shows you how seriously Apple is taking this now.

But the big question is, is it too late? Because Open AI just made a major move this past week. That could one day threaten the existence of the iPhone. This past week, Open AI shocked the tech world when they announced a $6.5 billion acquisition of a secretive AI hardware company called I.O. Now, what made this major news is that I.O. was founded by Johnny Ive.

Now, if that name sounds familiar, well, that's because Johnny Ive used to work at Apple. He's the man who designed pretty much every iconic Apple product, the iPod, the iPhone, the iPad, even those colorful Macs back in the day. But he left Apple back in 2019 after what they called creative differences. But the rumor is that it was a pretty messy breakup. Well, now Johnny Ive is teaming up with Sam Altman in OpenAI and building what they're calling a revolutionary new AI device. Now, details are still under wraps about this, but according to the Wall Street Journal, this device is meant to be a third device. So more stuff we got to carry around.

It's going to sit between your phone and your laptop. And Sam Altman believes that this could be a trillion dollar market opportunity. And their plan is to launch this product by next year. Now, that doesn't really sound like a direct iPhone replacement just yet. But Apple still should be sweating this because Open AI is probably not going to stop at just one product. If they find success, you bet they're going to be. coming for the iPhone. And beyond just Open AI, competition against Apple is coming from all sides now. Meta launched their smart Rayban glasses over a year ago. I actually own a pair and use them

pretty regularly. They're pretty awesome. Meta also showed off a prototype version of their AI smart glasses last year, which they think could one day replace your phone. On top of that, Google announced a partnership with Warby Parker to develop AR glasses. They showed that off at their Google I.O. event this week. And Amazon is reportedly working on a foldable device as well, according to Apple analyst Ming Chi Koo. So now Apple is suddenly surrounded by OpenAI, Meta, Google, Amazon. They're all building new hardware, and they're all trying to one day replace the device

that we carry around every day. So the pressure is now on Apple to innovate, and they're starting to cook up some stuff. Now, before we're talking about what Apple is working on now, I do want to point out that Apple being late to the party when it comes to innovative tech isn't exactly new. Honestly, it's kind of their thing. They let other companies spend the billions of dollars and all the risk when it comes to developing new technology.

And then Apple shows up with a beautifully designed version of that product that actually works and sells hundreds of millions of those products. This happened with MP3 players. This happened with smartphones. This happened with tablets, watches, earbuds, you name it. And the rumor has is that they're finally working on some AI powered hardware. According to Mark German from Bloomberg, Apple's version would have cameras, mics, speakers, and it would analyze your surroundings and allow you to, to take requests from Siri. They're reportedly aiming to launch this product by 2026.

So hopefully they fixed Siri by then. Apple's also reportedly experimenting with watches and earbuds with cameras built in. Not really sure how I feel about that. But either way, Apple needs a hit product here. Because they haven't had a hit product in a long time. Their last major new product was the Vision Pro. And when's the last time you saw someone wear one of those? And they also need to improve Siri and their AI model to be just as good as the

other players. We might learn more about Apple's AI efforts at their worldwide developer conference. That kicks off on June 9th. Now, the early reports are saying that Apple's not going to talk about Siri, which would be a huge disappointment. But I think there's one move that Apple could make overnight that could change the game. And it doesn't even require any major investment from them. If they just let users pick a default AI assistant for the iPhone, that would be a game changer. Imagine an iPhone powered by Chad GPT or Gemini. And yes, they currently have. And yes, they currently have. have a partnership with ChatGPT, but it goes through Siri first. And Siri is a disaster.

So let's just remove Siri altogether, give ChatchipT and Gemini access to the phone, and just continue to make the best hardware to run these AI models. The odds of that happening are probably pretty low, because remember, this is Apple we're talking about. They like to keep their ecosystem locked down. So they're probably not going to be cool with giving OpenAI or Google access to people's phones. Plus, there's the whole data privacy issues that Apple makes a big deal about.

So either Apple is going to have to run. relax how locked down their ecosystem is, or they're going to have to make Siri better. Either way, the pressure is on Apple. Expectations are kind of low, and time is starting to run out. Well, all right, guys, that's it for today's weekend, deep dive. Hope you guys enjoyed that one. Let us know in the comments what you think about Apple. Are you as bearish as others are, or do you think that Apple will figure out AI and end up

dominating the future? I'm starting to get a little nervous. So let us know in the comments on Spotify on what you guys think. And while you guys are there, hit us with a five-star rating on Spotify as well. That engagement really does help us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here next week.