Apple is jockeying for position in the AI arms race as it partners with OpenAI to bring ChatGPT to iPhones.

The partnership with OpenAI will enable Apple to integrate AI into its iPhone and Mac operating systems. The move will tap into ChatGPT to power Siri in dishing out personalised AI-curated content, while supporting other content generation tasks for Apple device users.

What is Apple Intelligence?

The update is part of a new AI system called Apple Intelligence, unveiled at WWDC 2024 on Monday. A test version will be released by fall.

Apple CEO Tim Cook is optimistic about the partnership. He believes OpenAI will take Apple products “to new heights”. Cook highlighted Siri’s enhanced capabilities with ChatGPT, including interacting with messages, emails, and calendars, along with third-party applications. Siri would also now be able to compose emails and adjust its tone of voice to match different occasions.

Industry observers had been anticipating such announcement, with investors reportedly feeling anxious about Apple potentially falling behind in the AI competition.

Ben Wood, chief analyst at research firm CCS Insight, expressed concern, however. The integration of ChatGPT into Siri would eventually expose the inherent limitations of Apple’s proprietary voice assistant, he told the BBC.

Data security and privacy ‘at the core’ of Apple Intelligence

During Monday's keynote, Apple also stressed its commitment to keeping the features of Apple Intelligence secure and the data of Apple consumers private. The company shared the security measures designed to protect user data.

Apple explained that some data processing would occur locally on devices, while tasks that require more computational power would be handled in the cloud. However, they assured that no data would be permanently stored in the cloud to maintain user privacy.

The iPhone maker also indicated its intention to set itself apart from competitors like Microsoft and Google by positioning privacy “at the core” of its features.

The emphasis on security is crucial, as Apple’s customer base often pays premium prices with the expectation of stringent privacy protections. These measures are part of Apple’s brand positioning.

Craig Federighi, Apple’s senior vice president of software engineering, detailed the integration of advanced generative models into devices like iPhones, iPads, and Macs. He said the technology leverages personal context to deliver the most useful and relevant intelligence and ensure privacy is protected at every step.

Apple fails to impress Wall Street

Despite the Apple leadership’s enthusiasm for the development, market response to the announcement was lukewarm as Apple’s stock price dropped by 1.91% on Monday.

The general expectation from Wall Street was for Apple to unveil much more groundbreaking products and features, not simply the integration of a service already available in the mainstream.

“There isn’t anything here that propels the brand ahead of its as-expected trajectory of incrementalism,” Forrester analyst Dipanjan Chatterjee said.

“Apple Intelligence will indeed delight its users in small but meaningful ways; it brings Apple level with, but not head and shoulders above, where its peers are at.” Apple’s competitor Samsung taunted the partnership, saying it was neither new or groundbreaking.

Tech billionaire Elon Musk, meanwhile, scoffed at the idea of ChatGPT integration and highlighted the data security risks it entailed.

“Apple has no clue what’s actually going on once they hand your data over to OpenAI,” Musk posted on X. “They’re selling you down the river.”

Musk also threatened to ban Apple products from his companies.