Apple Intelligence and the Race to Win Personal AI

Personal context, privacy, and an integrated approach give Apple a massive advantage

Dear subscribers,

Today, I want to talk about Apple Intelligence and the personal AI race.

Many people believe that Apple is behind in AI, but I think:

Apple is best positioned to win the personal AI race, which will be a step function improvement over today’s LLMs.

So let’s talk about:

1. Why personal context is the holy grail of AI

2. Why Apple is best positioned to win the personal AI race

3. How LLMs could become a commodity

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Why personal context is the holy grail of AI

As an AI power user, I can say with confidence that:

Including personal context in my prompts dramatically improves AI’s output.

Here are two quick examples of why personal context matters:

AI writing assistant

I have a 3,000-word prompt that I use to edit my newsletter posts (including this one!). The prompt starts simply enough:

I want you to help me edit a newsletter post.

STEP ONE

Use the <EXAMPLE> sections below to understand my style and then summarize it. Do not make any edits in this step.

STEP TWO

I’ll share my post with you. Please edit it using the style from STEP ONE.

<EXAMPLE>

I then include the full text of three of my best-performing posts as examples. The latter makes this prompt incredible at matching my writing style.

AI personal coach

I have another 2,000-word prompt that I use to get personal advice:

You're my personal coach. Your goal is to give honest advice and help me solve problems or questions I might ask you. Be concise and straightforward.

INSTRUCTIONS

Please use all the information below to advise me. Take your time and think step by step. Wait for me to ask you a question before you share advice.

<3 year vision>

<2024 goal>

<Background>

<Most popular content>

<Reader survey>

Again, this prompt is helpful because of the personal context and data that I include.

Now, here’s the thing:

Let’s explore why next.

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Why Apple is best positioned to win the personal AI race

Here’s Tim Cook’s pitch for Apple Intelligence:

So, as we look to build in these incredible new capabilities, we want to ensure that the outcome reflects the principles at the core of our products.

1. It has to be powerful enough to help with the things that matter most to you.

2. It has to be intuitive and easy to use.

3. It has to be deeply integrated into your product experiences.

4. Most importantly, it has to understand you and be grounded in your personal context, like your routine, your relationships, your communications, and more.

5. And, of course, it has to be built with privacy from the ground up.

Together, this goes beyond artificial intelligence. It's personal intelligence, and it's Apple's next big step.

Apple has always been known for being powerful and intuitive. Let’s dive deeper into integrated, personal context and privacy:

Integrated

Apple has built in-house its own on-device and private server models (source)

I run my life using my iPhone and Macbook (and so do 2.2 billion people).

Many people assumed that Apple would just call OpenAI for all AI tasks. Instead, at WWDC, they revealed their own:

1. On-device model for simple tasks like writing and summarizing content. They also introduced an on-device semantic index that lets Siri take action across apps.

2. Private cloud model for advanced AI queries while keeping your data secure.

This means that Apple can deliver:

1. The best offline AI. Many people will rely on Apple’s on-device model for simple AI queries instead of calling public LLMs.

2. The best vertically integrated AI. Many people prefer AI that works seamlessly across apps, OS, private cloud, and Apple devices.

Personal context

Apple has more personal context than any other AI.

If you run your life on Apple devices like me, then it follows that Apple knows more about you than any other AI.

Apple has my messages, emails, app usage, daily routines, and more.

The only company that comes close is Google (assuming you’re also a power user of Gmail, Search, and Workspace). However, since I can activate Siri and Apple Intelligence from any screen on my iPhone and Macbook, Apple can also read my personal context from any app, including Google’s.

Privacy

Personal context goes hand in hand with privacy, and privacy is where Apple wins.

Unlike other AI players, Apple’s business model doesn’t require monetizing your data.

Put simply, people don’t trust any other AI player with their data:

1. Google and Meta make money from targeted ads.

2. OpenAI has alot of drama.

3. Microsoft is dealing with the fallout from its Recall feature.

In contrast, Apple has long emphasized privacy. People’s trust in Apple to protect their data is a huge strategic advantage.

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Why LLMs could become a commodity

Apple has decided not to compete in public AI models (e.g., GPT-4o, Claude, Gemini, LLAMA) because it knows the real value is in an integrated, private, and personal AI.

Many companies are already building AI products in a way that allows them to swap to the best public model easily. Apple is doing the same with OpenAI. Users will:

1. Likely use Apple’s on-device and private cloud models first.

2. Need to opt in to use OpenAI explicitly.

3. Eventually be able to swap OpenAI with another model (e.g., Gemini, Claude).

Unless GPT-5 blows our minds, I think public models will likely become commodities. Like NVIDIA, Apple has wisely decided to compete as a platform that all these public models want access.

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Wrap up

To wrap up, Apple is competing in AI where they’re best positioned to win:

1. Integrated: Apple does vertical integration better than anyone else.

2. Personal: Apple devices understand 2.2B people better than anyone else.

3. Private: Apple’s brand and business model has more trust than anyone else.

Of course, we haven’t been able to actually try out Apple Intelligence yet.

But assuming Apple can execute, I think it’s poised to become an AI leader instead of a laggard in an area that everyone wants — an AI that deeply understands you as a person.

Let me know what you think in the comments!

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