NYT: Apple's AI Struggles Began with 2023 Chip Budget Dispute

Apple's current struggles with Apple Intelligence and Siri began in early 2023 when AI head John Giannandrea sought approval from CEO Tim Cook to purchase more AI chips for development, according to a new report from The New York Times.

apple intelligence black
Cook initially approved doubling the team's chip budget, but CFO Luca Maestri reportedly reduced the increase to less than half that amount, and instead encouraged the team to make existing chips more efficient.

The lack of adequate GPU resources meant Apple's AI team had to negotiate for computing power from providers like Google and Amazon.

At the time, Apple's data centers had about 50,000 GPUs that were more than five years old – far fewer than the hundreds of thousands of chips being purchased by competitors like Microsoft, Google, and Meta.

The NYT report goes on to cover the leadership conflicts within the company, describing a power struggle between Robby Walker, who oversaw Siri, and Sebastien Marineau-Mes, a senior executive with the software team. The two reportedly battled over who would spearhead Siri's new capabilities, with both ultimately receiving pieces of the project.

Apple Intelligence faced significant delays after internal testing revealed Siri was inaccurate on nearly a third of requests. Apple subsequently admitted that it would take longer than expected to roll out the more personalized ‌Siri‌ experience, and that these features will be rolled out "in the coming year."

However, according to the report, Apple still plans to release its enhanced Siri experience this fall. The functionality includes personal context, onscreen awareness, and improved app integration. Some Apple executives reportedly aren't concerned about the delay, and believe competitors haven't perfected AI either, giving Apple time to get it right.

Following the delay, software chief Craig Federighi reorganized executives, removing responsibility for the new Siri from Giannandrea and reassigning it to Mike Rockwell, who leads the Vision Pro division. The details of Apple's Siri team changes and the delayed Siri revamp were previously reported by Bloomberg and The Information.

For more details on Apple's internal issues, including political infighting, budget constraints, and talent drain, see The New York Times' full report.

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Top Rated Comments

wanha Avatar
13 weeks ago
Sounds like Apple committed the cardinal sin of innovation:

Trying to innovate in a cost-effective way.

That's a contradiction, because innovation requires exploring unknown territory, which means trying approaches that may not work.

Without this exploration, a company limits itself to incremental improvements within known boundaries - ie not actual innovation.

Innovation is thus inefficient by definition, and it requires leadership to acknowledge this in order for innovation to receive the resources it needs.
Score: 34 Votes (Like | Disagree)
antnythr Avatar
13 weeks ago
Apple Employees: Can we have AI?

Apple: We have AI at home

The AI at home:

At the time, Apple's data centers had about 50,000 GPUs that were more than five years old — far fewer than the hundreds of thousands of chips being purchased by competitors like Microsoft, Google, and Meta.
Score: 28 Votes (Like | Disagree)
0049190 Avatar
13 weeks ago
Why is the world’s richest company penny pinching on development costs? They seem more interested in their share price than their products and customers.
Score: 21 Votes (Like | Disagree)
D-a-a-n Avatar
13 weeks ago
Seems like they're struggling with a lot of things lately. Vision Pro, AI, software quality,... Maybe too many politics at board level.
Score: 19 Votes (Like | Disagree)
Falco McGregor Avatar
13 weeks ago
So now we have John Giannandrea or people close to him leaking to the press that the Apple Intelligence issues aren’t his fault. Reports from Bloomberg, The Information and now The NY Times on this are basically spinning narratives from the different camps at Apple to pin the blame. And at the end of the day, it sounds like most of these features will be out by September anyway. Embarrassing for sure but not nearly as big a story as the macro-economic forces that are far more a threat to Apple in the next three years.
Score: 16 Votes (Like | Disagree)
Jarman74 Avatar
13 weeks ago

Cook initially approved doubling the team's chip budget, but CFO Luca Maestri reportedly reduced the increase to less than half that amount, and instead encouraged the team to make existing chips more efficient.
What’s most staggering here is that Siri’s abysmal performance compared to the competition went unnoticed or was brushed off, even in light of ChatGPT’s obvious superiority at the beginning of 2023—especially when GPT-4 was released.

I’m all for sensible investment and spending, but if you failed to notice that Siri was being outperformed by every other assistant year after year—and despite sitting on an unfathomable pile of cash, you remained hellbent on penny-pinching—the full responsibility for the Apple Intelligence debacle falls squarely on you. It leaves me wondering whether Maestri was shown the door when the mistakes could no longer be swept under the rug.
Score: 16 Votes (Like | Disagree)