We’ll leave it to future retrospectives to show us if it turns out be a good or a bad thing, but artificial intelligence will change everything, so of course Apple is building a business around it. That shouldn’t surprise anyone.
Having likely spent billions on Private Cloud Compute, which Apple calls “the most advanced security architecture ever deployed for cloud AI compute at scale,” the company will — and does — want to recoup its investment.
But that investment may yet become the foundation of an Apple AI enterprise.
Putting the $ in AI
As I see it, while Apple has traditionally played its biggest role as a consumer-facing firm, there is a chance to think different when it comes to provisioning AI services.
Private Cloud Compute means Apple can offer generative AI tools to Apple Intelligence users, but it also gives the company a foundation from which to develop an enterprise-focused AI provisioning business.
Think AWS for private, secure, and sovereign cloud-based AI services.
There is a need for these. Many enterprises want to do more with AI but are unable to do so due to concerns around data security and national boundaries. This is particularly true in regulated industries, where “Trusted Cloud” is a fast-rising buzzword.
Apple doesn’t need to change too much to give them what they need. It doesn’t need to go head-to-head on enterprise AI cloud services; it can simply dance to its usual tune. That’s a jive in which, once Apple has put enough of its newly announced Private Cloud Compute servers in place, it offers fee-based access to those servers to third parties who want to host their own cloud-based services.
The private cloud for the rest of us?
Privacy-conscious Apple developers will want to do this, as will security-minded enterprises running Macs, iPads, and iPhones. That fee will let them offer highly secure private AI, either for internal business or for consumer-focused plays. Of course, consumers will also be able to use these services, and there may be a fee for that.
There is, after all, likely to be a lot of money to be made in offering highly secure, private, sovereign cloud-based infrastructure for AI.
In the future, Apple will want to build on its investment in Apple Intelligence with the introduction of specific AI tools it thinks people will be prepared to pay for. I don’t think those fee-based services will be among the first tranche of Apple Intelligence tools.
At first it makes sense to offer these services for no additional cost. It may even make sense in the longer term, given the probable spike in hardware sales Apple will enjoy as the AI PC/phone craze translates into Apple device sales — even as app sales decline to make way for AI agents.
Likely, plausible, possible
The most likely way Apple will recoup in the longer term is through offering some of its genAI models as services via iCloud, most likely within iCloud+, but also conceivably on a pay-per-use tariff.
It can also deliver services to Apple’s developer community that will enable them to offer trusted cloud-based AI experiences to iPhone, Mac, and iPad users.
But not every developer is consumer focused, which gives Apple the chance to provide support for proprietary enterprise-specific genAI apps. Given the fast pace at which enterprise users are adopting Apple products, that service may be a big win for the company, consolidating and extending upon its existing gains in enterprise tech.
The more you look at it, the clearer it becomes that Apple has lots of ways to benefit from the AI investments it is already putting into place. These opportunities are great, so it makes no sense at all for the company to ignore them.
All that said, in the EU, at least, Apple will need to convince the regulators that enabling an ecosystem for trusted cloud AI is a necessity, and while the nature and manner in which business is transacted in that space may need to be tweaked, there is real value (and real cost) in creating such an environment — particularly as the looming impact of genAI and quantum computing raises additional threats and opportunities in the computational world.
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