Apple: the Primacy of Privacy

AAPL sold off 2% today

After its run-up to the Worldwide Developers Conference, Apple stock sold off 2% today, as traders greeted Apple's introduction of its artificial-intelligence products with a yawn.

Apple said its new software will retrieve information from across apps and scan personal information to help users proofread text, call up photographs of specific family members or gauge traffic patterns ahead of an atypical commute. Users can create images and emojis and even convert rough sketches into polished diagrams...

For certain complex Siri requests, Apple will surface a prompt to ask if the user wants to connect with ChatGPT to get a better answer. Apple is also allowing ChatGPT to connect with other areas of the operating system, such as using the AI to help with composing text. Apple said it gives users the ability to control when and if they want to use ChatGPT...

Apple's AI features didn't overtake the competition technically, but as an Apple customer I really liked the emphasis on privacy. (By way of contrast Microsoft Windows' AI tool "Recall" takes snapshots of users' screens every five seconds and stores the images on an unencrypted database that is easily hacked.) [bold added]

Privacy is at the heart of Apple’s new AI capabilities, a feature that could further lock users into its ecosystem. Most processing will be done on a device instead of shipping to the servers in the cloud. But the company said for running larger AI models Apple will keep it private by running its own servers with what it calls Private Cloud Compute. It will only send data relevant to the task to these servers. The data isn’t stored or accessible by Apple for further training, the company said.

ChatGPT queries from Apple devices will be routed to OpenAI servers, but user information won’t be shared with OpenAI, and the startup won’t be able to identify the queries from specific Apple users. Apple will use a version of ChatGPT that is available free elsewhere online, but those with premium ChatGPT subscriptions will be able to link their accounts.

Users' data is stored on the device itself. If more processing power is needed, then tasks are diverted to Apple's private servers. Users can call on Open AI's ChatGPT, but even here protections are in place.

user information won’t be shared with OpenAI, and the startup won’t be able to identify the queries from specific Apple users.

As an Apple investor and a customer with privacy concerns, I appreciate the fact that Apple will be using its own silicon and not be as beholden as everyone else to external data centers running on Nvidia chips.

This fall I'll be buying a new iPhone 16. My six-year-old iPhone XS Max has served me well, but it's time to move on to the brave new AI world (as well as a much better camera and battery).

I'm not so presumptuous as to believe that hundreds of millions of iPhone, Mac, and iPad customers think like me and will soon upgrade their hardware, but there's a good chance that will be true, so if I didn't already own Apple stock, I'd be buying some.