Sam Altman and Apple's New CEO are Fighting Over One Thing. It's Not What You Think.

You know who Sam Alman is. You might not You know who Sam Alman is. You might not know who John Turnis is. He became Apple know who John Turnis is. He became Apple know who John Turnis is. He became Apple CEO over on September 1st. He's a CEO over on September 1st. He's a CEO over on September 1st. He's a hardware engineer. His second in command hardware engineer. His second in command hardware engineer. His second in command designs chips. And 8 days after taking designs chips. And 8 days after taking designs chips. And 8 days after taking over the top job, he has shipped a over the top job, he has shipped a over the top job, he has shipped a $1,999 $1,999 $1,999 folding phone. He's shipped a watch that folding phone. He's shipped a watch that folding phone. He's shipped a watch that remembers your conversations, an AI that remembers your conversations, an AI that remembers your conversations, an AI that wants to understand your health for you. wants to understand your health for you. wants to understand your health for you. But understand what you're looking at But understand what you're looking at But understand what you're looking at because these two are fighting over one because these two are fighting over one because these two are fighting over one thing. It's not the phone, it's where thing. It's not the phone, it's where thing. It's not the phone, it's where your work lives. Sam wants you to keep your work lives. Sam wants you to keep your work lives. Sam wants you to keep coming back to the agent. No matter what coming back to the agent. No matter what coming back to the agent. No matter what device you own, Chad GPT will be there. device you own, Chad GPT will be there. device you own, Chad GPT will be there. Turnis needs the device to stay central Turnis needs the device to stay central Turnis needs the device to stay central to your computing life. The iPhone has to your computing life. The iPhone has to your computing life. The iPhone has to keep mattering. Your history, the to keep mattering. Your history, the to keep mattering. Your history, the projects you've built up, the months projects you've built up, the months projects you've built up, the months you've spent teaching something how you you've spent teaching something how you you've spent teaching something how you work because whoever ends up holding work because whoever ends up holding work because whoever ends up holding that history is the company you're going that history is the company you're going that history is the company you're going to keep paying in the long term. And to keep paying in the long term. And to keep paying in the long term. And buried in that announcement is the one buried in that announcement is the one buried in that announcement is the one line I want you to grab out here. Hold line I want you to grab out here. Hold line I want you to grab out here. Hold on to this. Certain features that rely on to this. Certain features that rely on to this. Certain features that rely on server side models will have daily on server side models will have daily on server side models will have daily usage limits. All of those will be usage limits. All of those will be usage limits. All of those will be available with an additional fee for available with an additional fee for available with an additional fee for expanded access. Apple didn't print that expanded access. Apple didn't print that expanded access. Apple didn't print that price. I'm going to give you everything price. I'm going to give you everything price. I'm going to give you everything Apple announced here, right? The phones, Apple announced here, right? The phones, Apple announced here, right? The phones, the watch, the dates, what it all costs.

the watch, the dates, what it all costs. the watch, the dates, what it all costs. But keep that missing number in your But keep that missing number in your But keep that missing number in your head because Apple intends to sell you head because Apple intends to sell you head because Apple intends to sell you intelligence and OpenAI is trying to intelligence and OpenAI is trying to intelligence and OpenAI is trying to become the place you'd rather buy it become the place you'd rather buy it become the place you'd rather buy it from. Let's get the announcements from. Let's get the announcements from. Let's get the announcements correct first. All the prices I'm giving correct first. All the prices I'm giving correct first. All the prices I'm giving are US starting prices and obviously you are US starting prices and obviously you are US starting prices and obviously you can modify from there. The iPhone 18 Pro can modify from there. The iPhone 18 Pro can modify from there. The iPhone 18 Pro and Pro Max start at $1199 and $1299 and Pro Max start at $1199 and $1299 and Pro Max start at $1199 and $1299 respectively. Both get A20 Pro, a respectively. Both get A20 Pro, a respectively. Both get A20 Pro, a smaller dynamic island, and what Apple smaller dynamic island, and what Apple smaller dynamic island, and what Apple says is a substantial battery says is a substantial battery says is a substantial battery improvement. The main camera now has improvement. The main camera now has improvement. The main camera now has variable aperture, meaning it can variable aperture, meaning it can variable aperture, meaning it can physically adjust how much light it lets physically adjust how much light it lets physically adjust how much light it lets in. It's a pretty cool little thing. in. It's a pretty cool little thing. in. It's a pretty cool little thing. Pre-orders open September 12th, and the Pre-orders open September 12th, and the Pre-orders open September 12th, and the phones arrive September 18th. I guess phones arrive September 18th. I guess phones arrive September 18th. I guess you'll have to get in line at 5:00 a.m. you'll have to get in line at 5:00 a.m. you'll have to get in line at 5:00 a.m. on the 12th. Then there's iPhone Duo, on the 12th. Then there's iPhone Duo, on the 12th. Then there's iPhone Duo, Apple's first folding phone. It has a Apple's first folding phone. It has a Apple's first folding phone. It has a 5.4 in screen outside and a 7.6 in 5.4 in screen outside and a 7.6 in 5.4 in screen outside and a 7.6 in screen when you open it up, so it looks screen when you open it up, so it looks screen when you open it up, so it looks really big. You can run two apps side by really big. You can run two apps side by really big. You can run two apps side by side, open two windows of the same app, side, open two windows of the same app, side, open two windows of the same app, or have Siri beside the thing you're or have Siri beside the thing you're or have Siri beside the thing you're working on. It also uses an A20 Pro. It working on. It also uses an A20 Pro. It working on. It also uses an A20 Pro. It starts more expensive at 1999 and it starts more expensive at 1999 and it starts more expensive at 1999 and it arrives October 23 with pre-order arrives October 23 with pre-order arrives October 23 with pre-order starting on the 16th of October. This is starting on the 16th of October. This is starting on the 16th of October. This is the hardware change that Apple made to the hardware change that Apple made to the hardware change that Apple made to give AI more room to work with you. On give AI more room to work with you. On give AI more room to work with you. On the wrist, Apple announced Watch Series the wrist, Apple announced Watch Series the wrist, Apple announced Watch Series 12 starting at 3.99 and Ultra 4 starting 12 starting at 3.99 and Ultra 4 starting 12 starting at 3.99 and Ultra 4 starting at both arrived the 18th of September at both arrived the 18th of September at both arrived the 18th of September with the new S11 chip and a new health with the new S11 chip and a new health with the new S11 chip and a new health sensing system. Apple is claiming they sensing system. Apple is claiming they sensing system. Apple is claiming they can measure heart rate every 5 seconds can measure heart rate every 5 seconds can measure heart rate every 5 seconds now. And there's also a new readiness

now. And there's also a new readiness now. And there's also a new readiness score that uses activity, sleep, and score that uses activity, sleep, and score that uses activity, sleep, and other measurements to help you decide other measurements to help you decide other measurements to help you decide how hard to take on the day. I'm a how hard to take on the day. I'm a how hard to take on the day. I'm a little bit nervous about that one, little bit nervous about that one, little bit nervous about that one, frankly. We will come back to where all frankly. We will come back to where all frankly. We will come back to where all of this will lead later in the video. of this will lead later in the video. of this will lead later in the video. The new watches also have a really The new watches also have a really The new watches also have a really interesting set of AI announcements that interesting set of AI announcements that interesting set of AI announcements that are coming later in this year that we are coming later in this year that we are coming later in this year that we should pay attention to. Live rewind can should pay attention to. Live rewind can should pay attention to. Live rewind can show the last 15 seconds of any show the last 15 seconds of any show the last 15 seconds of any conversation as text. Siri recap can conversation as text. Siri recap can conversation as text. Siri recap can create a really brief summary you can create a really brief summary you can create a really brief summary you can revisit. You do have to opt in and Apple revisit. You do have to opt in and Apple revisit. You do have to opt in and Apple is saying those features do not create is saying those features do not create is saying those features do not create or store audio recordings and you'll or store audio recordings and you'll or store audio recordings and you'll have to decide if that's worth it to you have to decide if that's worth it to you have to decide if that's worth it to you from a privacy perspective. Both of from a privacy perspective. Both of from a privacy perspective. Both of those features arrive in beta late 2026 those features arrive in beta late 2026 those features arrive in beta late 2026 and initially in English only outside and initially in English only outside and initially in English only outside the EU and both require a compatible the EU and both require a compatible the EU and both require a compatible iPhone. That could give Siri useful iPhone. That could give Siri useful iPhone. That could give Siri useful information from conversations you never information from conversations you never information from conversations you never typed into a computer, but the typed into a computer, but the typed into a computer, but the functionality is very much going to functionality is very much going to functionality is very much going to depend on implementation there. And depend on implementation there. And depend on implementation there. And that's another way for Apple to make that's another way for Apple to make that's another way for Apple to make that Siri assistant available while you that Siri assistant available while you that Siri assistant available while you are heads up doing anything else. The are heads up doing anything else. The are heads up doing anything else. The big Siri redesign, speaking of Siri, was big Siri redesign, speaking of Siri, was big Siri redesign, speaking of Siri, was introduced at WWDC back in June, and the introduced at WWDC back in June, and the introduced at WWDC back in June, and the beta is now rolling out with iOS 27 and beta is now rolling out with iOS 27 and beta is now rolling out with iOS 27 and Watch OS27 on the 14th of September, Watch OS27 on the 14th of September, Watch OS27 on the 14th of September, initially in English and on supported initially in English and on supported initially in English and on supported devices outside the EU. The promise here devices outside the EU. The promise here devices outside the EU. The promise here is a Siri that can use information from is a Siri that can use information from is a Siri that can use information from your messages, from emails, from photos, your messages, from emails, from photos, your messages, from emails, from photos, and understand what is on your screen and understand what is on your screen and understand what is on your screen and then take action. So, the and then take action. So, the and then take action. So, the announcements in Apple's launch video

announcements in Apple's launch video announcements in Apple's launch video really take that software direction really take that software direction really take that software direction alongside the hardware that Apple is alongside the hardware that Apple is alongside the hardware that Apple is building to make all of this possible. building to make all of this possible. building to make all of this possible. The rollout dates here, we're going to The rollout dates here, we're going to The rollout dates here, we're going to have to see how the software works on have to see how the software works on have to see how the software works on existing Apple devices versus how well existing Apple devices versus how well existing Apple devices versus how well it works on the new stuff Apple it works on the new stuff Apple it works on the new stuff Apple announced. Health also gets a redesign announced. Health also gets a redesign announced. Health also gets a redesign later in the year. So, with AI guidance, later in the year. So, with AI guidance, later in the year. So, with AI guidance, you're going to be able to view longer you're going to be able to view longer you're going to be able to view longer term health metrics. You're going to term health metrics. You're going to term health metrics. You're going to have the ability to arrange lab testing have the ability to arrange lab testing have the ability to arrange lab testing through the app, and that deserves a lot through the app, and that deserves a lot through the app, and that deserves a lot more attention than it got, even though more attention than it got, even though more attention than it got, even though it only got a really quick mention in it only got a really quick mention in it only got a really quick mention in the product recap. It's going to change the product recap. It's going to change the product recap. It's going to change how people decide to seek healthcare. how people decide to seek healthcare. how people decide to seek healthcare. Lading it all back together, those Lading it all back together, those Lading it all back together, those products give Apple more opportunities products give Apple more opportunities products give Apple more opportunities to become the AI you use all the way to become the AI you use all the way to become the AI you use all the way through the day. So, what I'm watching through the day. So, what I'm watching through the day. So, what I'm watching here is whether they give you a reason here is whether they give you a reason here is whether they give you a reason to choose Apple when you need something to choose Apple when you need something to choose Apple when you need something done versus choosing some other AI done versus choosing some other AI done versus choosing some other AI service. Imagine you buy the new iPhone, service. Imagine you buy the new iPhone, service. Imagine you buy the new iPhone, you have a great screen, great battery, you have a great screen, great battery, you have a great screen, great battery, powerful new chip, and the place you get powerful new chip, and the place you get powerful new chip, and the place you get your work done, well, it's chat GPT or your work done, well, it's chat GPT or your work done, well, it's chat GPT or hey, it's Claude. Your projects live hey, it's Claude. Your projects live hey, it's Claude. Your projects live there. The agent has learned what you've there. The agent has learned what you've there. The agent has learned what you've want. You've spent months working want. You've spent months working want. You've spent months working through your business and your plans and through your business and your plans and through your business and your plans and the things you need to finish and buying the things you need to finish and buying the things you need to finish and buying a different phone. That would barely a different phone. That would barely a different phone. That would barely interrupt any of that. All you care interrupt any of that. All you care interrupt any of that. All you care about is whether you can plug into your about is whether you can plug into your about is whether you can plug into your little Mac Mini and have your open claw little Mac Mini and have your open claw little Mac Mini and have your open claw working from there. So sure, in that working from there. So sure, in that working from there. So sure, in that situation, Apple still sold you the situation, Apple still sold you the situation, Apple still sold you the phone technically. It can still have a phone technically. It can still have a phone technically. It can still have a very good business, but the relationship very good business, but the relationship very good business, but the relationship that gets more valuable every day. The that gets more valuable every day. The that gets more valuable every day. The relationship you put more of your life

relationship you put more of your life relationship you put more of your life into that doesn't belong to Apple into that doesn't belong to Apple into that doesn't belong to Apple anymore. And if that other company, if anymore. And if that other company, if anymore. And if that other company, if OpenAI, somebody else can keep getting OpenAI, somebody else can keep getting OpenAI, somebody else can keep getting more work done for you, well, it has a more work done for you, well, it has a more work done for you, well, it has a pretty good reason to keep asking you pretty good reason to keep asking you pretty good reason to keep asking you for money. And that's the fight I see for money. And that's the fight I see for money. And that's the fight I see behind this Apple launch. Meanwhile, behind this Apple launch. Meanwhile, behind this Apple launch. Meanwhile, Google is happy to help Apple out while Google is happy to help Apple out while Google is happy to help Apple out while competing for the same customer through competing for the same customer through competing for the same customer through Gemini. Nvidia supplies some of the Gemini. Nvidia supplies some of the Gemini. Nvidia supplies some of the machinery underneath all of this. And machinery underneath all of this. And machinery underneath all of this. And buried in Apple's announcement is a clue buried in Apple's announcement is a clue buried in Apple's announcement is a clue about how Apple intends to get paid for about how Apple intends to get paid for about how Apple intends to get paid for more of that relationship itself. Let's more of that relationship itself. Let's more of that relationship itself. Let's dig in here. Start with the threat to dig in here. Start with the threat to dig in here. Start with the threat to Apple because it doesn't require the Apple because it doesn't require the Apple because it doesn't require the iPhone to be a bad product to have a iPhone to be a bad product to have a iPhone to be a bad product to have a threat. The phone can get better every threat. The phone can get better every threat. The phone can get better every single year. and I'm sure it will. Well, single year. and I'm sure it will. Well, single year. and I'm sure it will. Well, the reason you reach for it, that keeps the reason you reach for it, that keeps the reason you reach for it, that keeps changing. If your agent is where you changing. If your agent is where you changing. If your agent is where you keep your working context, as I've been keep your working context, as I've been keep your working context, as I've been sharing, if the agent is where you sharing, if the agent is where you sharing, if the agent is where you organize your projects, if the agent is organize your projects, if the agent is organize your projects, if the agent is where you make your decision, then where you make your decision, then where you make your decision, then that's where your loyalty is going to that's where your loyalty is going to that's where your loyalty is going to go. You want the agent that already go. You want the agent that already go. You want the agent that already understands your work, and that's what understands your work, and that's what understands your work, and that's what you'll commit to. That relationship is you'll commit to. That relationship is you'll commit to. That relationship is something an AI company can keep something an AI company can keep something an AI company can keep building and building and building over building and building and building over building and building and building over time. It can offer more capability, time. It can offer more capability, time. It can offer more capability, connect you to more applications. It can connect you to more applications. It can connect you to more applications. It can take a larger part of the job, take a larger part of the job, take a larger part of the job, especially with computer use. As you especially with computer use. As you especially with computer use. As you give it more work, you have more reasons give it more work, you have more reasons give it more work, you have more reasons to return. In this world, Apple would to return. In this world, Apple would to return. In this world, Apple would still control the device and the still control the device and the still control the device and the software, but some other company is software, but some other company is software, but some other company is going to become the one you think of going to become the one you think of going to become the one you think of when you want anything important done, when you want anything important done, when you want anything important done, and that does hurt Apple's valuation and that does hurt Apple's valuation and that does hurt Apple's valuation long term. You can already see OpenAI

long term. You can already see OpenAI long term. You can already see OpenAI moving in this direction. Chat GPT moving in this direction. Chat GPT moving in this direction. Chat GPT supports applications inside the supports applications inside the supports applications inside the conversation. The chat GPT2 work has a conversation. The chat GPT2 work has a conversation. The chat GPT2 work has a cloud browser that can carry out tasks cloud browser that can carry out tasks cloud browser that can carry out tasks on supported websites and keep on on supported websites and keep on on supported websites and keep on working after you close your computer working after you close your computer working after you close your computer and it only pauses when it needs your and it only pauses when it needs your and it only pauses when it needs your permission. OpenAI is building places permission. OpenAI is building places permission. OpenAI is building places where work happens along with the models where work happens along with the models where work happens along with the models that do the thinking and their bet is that do the thinking and their bet is that do the thinking and their bet is that work is going to translate into a that work is going to translate into a that work is going to translate into a lot of downstream value. And then lot of downstream value. And then lot of downstream value. And then there's Joanie Ivan, the IO hardware there's Joanie Ivan, the IO hardware there's Joanie Ivan, the IO hardware team. OpenAI brought them in to work on team. OpenAI brought them in to work on team. OpenAI brought them in to work on the computing experience itself. I've the computing experience itself. I've the computing experience itself. I've spent years helping define what people spent years helping define what people spent years helping define what people expect from Apple products. What we see expect from Apple products. What we see expect from Apple products. What we see here is a legacy of his vision as much here is a legacy of his vision as much here is a legacy of his vision as much as Steve's. That makes his involvement as Steve's. That makes his involvement as Steve's. That makes his involvement really interesting for much more than really interesting for much more than really interesting for much more than the design of whatever device emerges. the design of whatever device emerges. the design of whatever device emerges. It says OpenAI is thinking about the It says OpenAI is thinking about the It says OpenAI is thinking about the whole stack, the whole experience of whole stack, the whole experience of whole stack, the whole experience of using intelligence, including the using intelligence, including the using intelligence, including the hardware and the interface through which hardware and the interface through which hardware and the interface through which you reach it. They're not done just with you reach it. They're not done just with you reach it. They're not done just with a chat window. So when Apple changes the a chat window. So when Apple changes the a chat window. So when Apple changes the computing inside the phone and gives you computing inside the phone and gives you computing inside the phone and gives you a different way to interact with an a different way to interact with an a different way to interact with an assistant, I see Apple as a company that assistant, I see Apple as a company that assistant, I see Apple as a company that is now answering a serious competitive is now answering a serious competitive is now answering a serious competitive threat. I don't know if it's going to threat. I don't know if it's going to threat. I don't know if it's going to work, but they're paying attention. Open work, but they're paying attention. Open work, but they're paying attention. Open AAI doesn't have to replace every part AAI doesn't have to replace every part AAI doesn't have to replace every part of your phone or your computer to become of your phone or your computer to become of your phone or your computer to become the most valuable part of using that the most valuable part of using that the most valuable part of using that device. Apple has got to make a case for device. Apple has got to make a case for device. Apple has got to make a case for keeping more of that experience inside keeping more of that experience inside keeping more of that experience inside the system that it provides. Back in the system that it provides. Back in the system that it provides. Back in April when we talked about the Apple April when we talked about the Apple April when we talked about the Apple leadership change, I pointed out that

leadership change, I pointed out that leadership change, I pointed out that Apple was putting a hardware engineer at Apple was putting a hardware engineer at Apple was putting a hardware engineer at the top and elevating its chip the top and elevating its chip the top and elevating its chip leadership alongside him. My read at the leadership alongside him. My read at the leadership alongside him. My read at the time was that Apple intended to compete time was that Apple intended to compete time was that Apple intended to compete through advantages it had spent years through advantages it had spent years through advantages it had spent years building in silicon and in devices. building in silicon and in devices. building in silicon and in devices. Well, Turnis became CEO on the 1st of Well, Turnis became CEO on the 1st of Well, Turnis became CEO on the 1st of September and now we get to see that September and now we get to see that September and now we get to see that argument take shape in the products his argument take shape in the products his argument take shape in the products his Apple is going to have to deliver. For Apple is going to have to deliver. For Apple is going to have to deliver. For me, this is move one in that new Apple me, this is move one in that new Apple me, this is move one in that new Apple cadence. These products took years to cadence. These products took years to cadence. These products took years to develop. Sure, a lot of them under Tim. develop. Sure, a lot of them under Tim. develop. Sure, a lot of them under Tim. But the next question is, how is Apple But the next question is, how is Apple But the next question is, how is Apple going to build on that? How is Apple going to build on that? How is Apple going to build on that? How is Apple going to deliver more capable models, going to deliver more capable models, going to deliver more capable models, better applications, more uses for the better applications, more uses for the better applications, more uses for the computing it is putting in people's computing it is putting in people's computing it is putting in people's hands? I expect the additional capacity hands? I expect the additional capacity hands? I expect the additional capacity to matter way beyond the features in to matter way beyond the features in to matter way beyond the features in this announcement. The chips matter a this announcement. The chips matter a this announcement. The chips matter a ton and what they do with them is ton and what they do with them is ton and what they do with them is something we're going to see over months something we're going to see over months something we're going to see over months to come. That's part of the bet and it's to come. That's part of the bet and it's to come. That's part of the bet and it's a reason I'm really interested in where a reason I'm really interested in where a reason I'm really interested in where Turnis goes next here. But first, Apple Turnis goes next here. But first, Apple Turnis goes next here. But first, Apple has to deal with Siri because Siri has has to deal with Siri because Siri has has to deal with Siri because Siri has been annoyingly slow and annoyingly dumb been annoyingly slow and annoyingly dumb been annoyingly slow and annoyingly dumb for a long, long time. I am tired of for a long, long time. I am tired of for a long, long time. I am tired of asking for something, watching the asking for something, watching the asking for something, watching the screen glow, and waiting and then screen glow, and waiting and then screen glow, and waiting and then sometimes the result gives me a whole sometimes the result gives me a whole sometimes the result gives me a whole new reason to wonder why I bothered.

new reason to wonder why I bothered. new reason to wonder why I bothered. It's just a disaster. There is a cost to It's just a disaster. There is a cost to It's just a disaster. There is a cost to that which doesn't appear in any kind of that which doesn't appear in any kind of that which doesn't appear in any kind of model or brand benchmark. People learn model or brand benchmark. People learn model or brand benchmark. People learn to stop asking. If doing it yourself is to stop asking. If doing it yourself is to stop asking. If doing it yourself is quicker than explaining to the stupid AI quicker than explaining to the stupid AI quicker than explaining to the stupid AI assistant and checking whether it assistant and checking whether it assistant and checking whether it understood, you're going to do it understood, you're going to do it understood, you're going to do it yourself and be annoyed with the brand. yourself and be annoyed with the brand. yourself and be annoyed with the brand. After enough of those experiences, Apple After enough of those experiences, Apple After enough of those experiences, Apple can announce all the intelligence it can announce all the intelligence it can announce all the intelligence it wants. You're still going to reach for wants. You're still going to reach for wants. You're still going to reach for the app. You're still going to search the app. You're still going to search the app. You're still going to search your email. You're still going to open your email. You're still going to open your email. You're still going to open the AI you do trust. I don't want to the AI you do trust. I don't want to the AI you do trust. I don't want to stand here negotiating with my phone stand here negotiating with my phone stand here negotiating with my phone over something I could have had done over something I could have had done over something I could have had done already. I don't have the time for that. already. I don't have the time for that. already. I don't have the time for that. Apple is going to have to earn its way Apple is going to have to earn its way Apple is going to have to earn its way back into the AI assistant moment. Back back into the AI assistant moment. Back back into the AI assistant moment. Back in June, I said if Siri feels dumb, as in June, I said if Siri feels dumb, as in June, I said if Siri feels dumb, as it has, the whole device feels dumb. it has, the whole device feels dumb. it has, the whole device feels dumb. That is still how people are going to That is still how people are going to That is still how people are going to judge this. Apple starts with a device judge this. Apple starts with a device judge this. Apple starts with a device they already use, but it also starts they already use, but it also starts they already use, but it also starts with an assistant many people have with an assistant many people have with an assistant many people have learned to work around and avoid. Every learned to work around and avoid. Every learned to work around and avoid. Every interaction that goes wrong with Siri interaction that goes wrong with Siri interaction that goes wrong with Siri gives other AI companies another chance gives other AI companies another chance gives other AI companies another chance to become the place that we go instead.

to become the place that we go instead. to become the place that we go instead. Sure, doing more locally can help and Sure, doing more locally can help and Sure, doing more locally can help and Apple's saying they're going there, Apple's saying they're going there, Apple's saying they're going there, especially with voice. If the device especially with voice. If the device especially with voice. If the device handles part of the interaction itself, handles part of the interaction itself, handles part of the interaction itself, that work avoids a trip to a server and that work avoids a trip to a server and that work avoids a trip to a server and it ends up being faster. Apple has it ends up being faster. Apple has it ends up being faster. Apple has already described local speech already described local speech already described local speech capabilities and tools for finding capabilities and tools for finding capabilities and tools for finding context with private cloud compute context with private cloud compute context with private cloud compute handling harder requests. It's a hybrid handling harder requests. It's a hybrid handling harder requests. It's a hybrid solution where you have a local agent on solution where you have a local agent on solution where you have a local agent on the phone for easy stuff and you head to the phone for easy stuff and you head to the phone for easy stuff and you head to the cloud for the hard stuff. The the cloud for the hard stuff. The the cloud for the hard stuff. The opportunity here is to make help arrive opportunity here is to make help arrive opportunity here is to make help arrive quickly enough that asking Siri feels quickly enough that asking Siri feels quickly enough that asking Siri feels really really natural. So actual speed really really natural. So actual speed really really natural. So actual speed and reliability still have to come along and reliability still have to come along and reliability still have to come along and become habitual. And so we're going and become habitual. And so we're going and become habitual. And so we're going to have to try it and find it's fast and to have to try it and find it's fast and to have to try it and find it's fast and find it works to really earn series find it works to really earn series find it works to really earn series attention. Again, let's take the call attention. Again, let's take the call attention. Again, let's take the call context feature that Apple announced. context feature that Apple announced. context feature that Apple announced. You're calling a business and the phone You're calling a business and the phone You're calling a business and the phone app can bring up something relevant like app can bring up something relevant like app can bring up something relevant like a confirmation code or a reservation a confirmation code or a reservation a confirmation code or a reservation number on the call. Think about the number on the call. Think about the number on the call. Think about the ordinary situation there. Someone on the ordinary situation there. Someone on the ordinary situation there. Someone on the other end is waiting for that number. other end is waiting for that number. other end is waiting for that number. You know you have it somewhere. Your You know you have it somewhere. Your You know you have it somewhere. Your phone probably has the information, an phone probably has the information, an phone probably has the information, an email or something. The useful thing is email or something. The useful thing is email or something. The useful thing is getting it in front of you while you getting it in front of you while you getting it in front of you while you need it in that moment. That's a small need it in that moment. That's a small need it in that moment. That's a small moment that tells us something about moment that tells us something about moment that tells us something about where Apple is going here. If the phone where Apple is going here. If the phone where Apple is going here. If the phone keeps getting those moments right, you keeps getting those moments right, you keeps getting those moments right, you and me, we're going to begin to trust it and me, we're going to begin to trust it and me, we're going to begin to trust it with the next thing. The watch and with the next thing. The watch and with the next thing. The watch and AirPods give that bet even more chances AirPods give that bet even more chances AirPods give that bet even more chances to work. You can ask while your hands to work. You can ask while your hands to work. You can ask while your hands are busy or get help with an instruction are busy or get help with an instruction are busy or get help with an instruction you missed in a conversation. Apple gets

you missed in a conversation. Apple gets you missed in a conversation. Apple gets those little opportunities to help that those little opportunities to help that those little opportunities to help that don't start with you opening a chatbot. don't start with you opening a chatbot. don't start with you opening a chatbot. And those are habits another AI company And those are habits another AI company And those are habits another AI company would have to persuade you to change would have to persuade you to change would have to persuade you to change because Apple has that hardware because Apple has that hardware because Apple has that hardware advantage. Duo, the foldable phone, advantage. Duo, the foldable phone, advantage. Duo, the foldable phone, gives that interaction even more room to gives that interaction even more room to gives that interaction even more room to work. You can have Siri beside the work. You can have Siri beside the work. You can have Siri beside the content you're working with so the thing content you're working with so the thing content you're working with so the thing you're asking about stays visible all you're asking about stays visible all you're asking about stays visible all the time. Imagine you're revising a the time. Imagine you're revising a the time. Imagine you're revising a message about a complicated plan with message about a complicated plan with message about a complicated plan with relevant information sitting beside you. relevant information sitting beside you. relevant information sitting beside you. You catch a misunderstanding. You point You catch a misunderstanding. You point You catch a misunderstanding. You point at what needs to change and you keep at what needs to change and you keep at what needs to change and you keep going. That kind of interaction could going. That kind of interaction could going. That kind of interaction could make working through something with an make working through something with an make working through something with an assistant much more practical on a phone assistant much more practical on a phone assistant much more practical on a phone than it used to be. Duo gives you the than it used to be. Duo gives you the than it used to be. Duo gives you the space to do that. Now, Apple says the space to do that. Now, Apple says the space to do that. Now, Apple says the A20 Pro has twice the neural compute of A20 Pro has twice the neural compute of A20 Pro has twice the neural compute of its predecessor, which sounds great, and its predecessor, which sounds great, and its predecessor, which sounds great, and that absolutely is additional capacity that absolutely is additional capacity that absolutely is additional capacity for models to use, but just twice the for models to use, but just twice the for models to use, but just twice the capacity is not necessarily a guarantee capacity is not necessarily a guarantee capacity is not necessarily a guarantee it's going to be twice as fast. Now, if it's going to be twice as fast. Now, if it's going to be twice as fast. Now, if you take that and you have more room to you take that and you have more room to you take that and you have more room to interact and you have more memory and interact and you have more memory and interact and you have more memory and you can work with the machine and you you can work with the machine and you you can work with the machine and you have a larger capability envelope, I have a larger capability envelope, I have a larger capability envelope, I think you can see why Apple is literally think you can see why Apple is literally think you can see why Apple is literally in this case widening the aperture for in this case widening the aperture for in this case widening the aperture for what people might do with AI on a phone.

what people might do with AI on a phone. what people might do with AI on a phone. We are going to have to see this We are going to have to see this We are going to have to see this experience outside of presentation to experience outside of presentation to experience outside of presentation to find out if it's real. Duo is going to find out if it's real. Duo is going to find out if it's real. Duo is going to arrive in October. Siri AI starts arrive in October. Siri AI starts arrive in October. Siri AI starts rolling out in beta this month on rolling out in beta this month on rolling out in beta this month on existing hardware. But the combination existing hardware. But the combination existing hardware. But the combination of the two is what really interests me. of the two is what really interests me. of the two is what really interests me. Apple is giving consumers more Apple is giving consumers more Apple is giving consumers more capability, literally more screen space, capability, literally more screen space, capability, literally more screen space, and developers get more chip control and and developers get more chip control and and developers get more chip control and more room to work with it. The device more room to work with it. The device more room to work with it. The device can potentially at least become a place can potentially at least become a place can potentially at least become a place where people do more with AI and people where people do more with AI and people where people do more with AI and people who would never spend a weekend learning who would never spend a weekend learning who would never spend a weekend learning chat GPT or understanding LLM can still chat GPT or understanding LLM can still chat GPT or understanding LLM can still use AI successfully. That's always been use AI successfully. That's always been use AI successfully. That's always been the Apple promise. And stepping up the Apple promise. And stepping up the Apple promise. And stepping up beyond October, I think there's a bigger beyond October, I think there's a bigger beyond October, I think there's a bigger opportunity here than just improving on opportunity here than just improving on opportunity here than just improving on the tasks that we already know people the tasks that we already know people the tasks that we already know people ask for and want. When you're in a ask for and want. When you're in a ask for and want. When you're in a position where you own useful computers, position where you own useful computers, position where you own useful computers, literally in your pocket, trying a new literally in your pocket, trying a new literally in your pocket, trying a new idea is almost free. You paid for the idea is almost free. You paid for the idea is almost free. You paid for the machine, you paid for the electricity, machine, you paid for the electricity, machine, you paid for the electricity, you may pay for the app, but work that you may pay for the app, but work that you may pay for the app, but work that runs locally doesn't really add any new runs locally doesn't really add any new runs locally doesn't really add any new charges. You can just try it and that charges. You can just try it and that charges. You can just try it and that gives us more room to experiment and it gives us more room to experiment and it gives us more room to experiment and it makes the friction for adopting new AI makes the friction for adopting new AI makes the friction for adopting new AI very, very low. And so in that world, very, very low. And so in that world, very, very low. And so in that world, someone can keep refining an application someone can keep refining an application someone can keep refining an application because using the model again is super because using the model again is super because using the model again is super affordable. And so app developers have affordable. And so app developers have affordable. And so app developers have lots of options there. A customer can lots of options there. A customer can lots of options there. A customer can try the feature in situations the try the feature in situations the try the feature in situations the developer didn't anticipate and we'll developer didn't anticipate and we'll developer didn't anticipate and we'll see if it works. Some of those attempts see if it works. Some of those attempts see if it works. Some of those attempts of course are not going to work. A few of course are not going to work. A few of course are not going to work. A few will. A few may reveal something that will. A few may reveal something that will. A few may reveal something that people want to do repeatedly and you may people want to do repeatedly and you may people want to do repeatedly and you may get whole ecosystems and economies

get whole ecosystems and economies get whole ecosystems and economies developing around that. That is how more developing around that. That is how more developing around that. That is how more capability in a device can produce capability in a device can produce capability in a device can produce demand for uses that were not at all demand for uses that were not at all demand for uses that were not at all obvious when that hardware shipped. I obvious when that hardware shipped. I obvious when that hardware shipped. I want to preserve that possibility when want to preserve that possibility when want to preserve that possibility when we talk about Apple's position here. It we talk about Apple's position here. It we talk about Apple's position here. It is way too early in my view to assign is way too early in my view to assign is way too early in my view to assign all of the important work to the all of the important work to the all of the important work to the frontier labs on these machines and frontier labs on these machines and frontier labs on these machines and leave local AI with tiny conveniences. leave local AI with tiny conveniences. leave local AI with tiny conveniences. Making intelligence easier to reach for Making intelligence easier to reach for Making intelligence easier to reach for and cheaper to use can change what and cheaper to use can change what and cheaper to use can change what people are willing to attempt. Apple's people are willing to attempt. Apple's people are willing to attempt. Apple's giving itself a chance to benefit from giving itself a chance to benefit from giving itself a chance to benefit from all of that AI experimentation here. all of that AI experimentation here. all of that AI experimentation here. Now, the company still has to turn that Now, the company still has to turn that Now, the company still has to turn that capacity into an experience people want, capacity into an experience people want, capacity into an experience people want, but we saw a step toward that in Apple's but we saw a step toward that in Apple's but we saw a step toward that in Apple's launch day. Health is where that launch day. Health is where that launch day. Health is where that possibility becomes super super possibility becomes super super possibility becomes super super personal. Apple wants to use AI to be personal. Apple wants to use AI to be personal. Apple wants to use AI to be the doctor before you call the doctor. the doctor before you call the doctor. the doctor before you call the doctor. That's my read on the launch That's my read on the launch That's my read on the launch announcement. Apple's bringing announcement. Apple's bringing announcement. Apple's bringing continuous watch measurements, clinical continuous watch measurements, clinical continuous watch measurements, clinical records, and AI guidance all together records, and AI guidance all together records, and AI guidance all together under health. Later this year, you'll be under health. Later this year, you'll be under health. Later this year, you'll be able to arrange blood testing through able to arrange blood testing through able to arrange blood testing through the app. 120 bucks or 119 bucks for more the app. 120 bucks or 119 bucks for more the app. 120 bucks or 119 bucks for more than 50 biioarkers with a company called than 50 biioarkers with a company called than 50 biioarkers with a company called Quest doing all of that testing for Quest doing all of that testing for Quest doing all of that testing for Apple. There's a specific reason that Apple. There's a specific reason that Apple. There's a specific reason that you would care about local AI here. As you would care about local AI here. As you would care about local AI here. As you might expect, Apple says its new you might expect, Apple says its new you might expect, Apple says its new movement evaluations will use the iPhone movement evaluations will use the iPhone movement evaluations will use the iPhone camera and watch to assess literally how camera and watch to assess literally how camera and watch to assess literally how you move through space with processing you move through space with processing you move through space with processing done entirely on device for privacy. The done entirely on device for privacy. The done entirely on device for privacy. The video won't be recorded or stored or

video won't be recorded or stored or video won't be recorded or stored or shared anywhere. And that gives you a shared anywhere. And that gives you a shared anywhere. And that gives you a really useful capability without really useful capability without really useful capability without uploading any footage about what you uploading any footage about what you uploading any footage about what you look like or your body. Apple hasn't look like or your body. Apple hasn't look like or your body. Apple hasn't said that all of its new health AI works said that all of its new health AI works said that all of its new health AI works locally, but I would assume they are locally, but I would assume they are locally, but I would assume they are leaning into local AI wherever they can leaning into local AI wherever they can leaning into local AI wherever they can because of that privacy messaging. Now, because of that privacy messaging. Now, because of that privacy messaging. Now, imagine you've been feeling a little bit imagine you've been feeling a little bit imagine you've been feeling a little bit off, a little bit sick, and you open off, a little bit sick, and you open off, a little bit sick, and you open health to make sense of all of it. If health to make sense of all of it. If health to make sense of all of it. If Apple becomes the first place you turn, Apple becomes the first place you turn, Apple becomes the first place you turn, Apple's interpretation of your health Apple's interpretation of your health Apple's interpretation of your health can shape whether you call a doctor, can shape whether you call a doctor, can shape whether you call a doctor, what you ask your doctor, which tests what you ask your doctor, which tests what you ask your doctor, which tests you seek. All of that can help someone you seek. All of that can help someone you seek. All of that can help someone get useful care earlier. But in a worst get useful care earlier. But in a worst get useful care earlier. But in a worst case scenario, it can also create case scenario, it can also create case scenario, it can also create unnecessary anxiety, over testing. We unnecessary anxiety, over testing. We unnecessary anxiety, over testing. We are going to need a lot of evidence that are going to need a lot of evidence that are going to need a lot of evidence that this guidance improves care. And knowing this guidance improves care. And knowing this guidance improves care. And knowing Apple, I suspect they're working on Apple, I suspect they're working on Apple, I suspect they're working on that. And think about what all of this that. And think about what all of this that. And think about what all of this means for the relationships we've been means for the relationships we've been means for the relationships we've been talking about. Apple already makes the talking about. Apple already makes the talking about. Apple already makes the watch collecting your measurements and watch collecting your measurements and watch collecting your measurements and the phone where you keep your history.

the phone where you keep your history. the phone where you keep your history. If you come to trust Apple's If you come to trust Apple's If you come to trust Apple's interpretation of all of that, another interpretation of all of that, another interpretation of all of that, another AI company has to give you a real good AI company has to give you a real good AI company has to give you a real good reason to take that question anywhere reason to take that question anywhere reason to take that question anywhere else. So Apple could influence a health else. So Apple could influence a health else. So Apple could influence a health care decision before a clinician enters care decision before a clinician enters care decision before a clinician enters the conversation and by doing so earn a the conversation and by doing so earn a the conversation and by doing so earn a really consequential kind of trust that really consequential kind of trust that really consequential kind of trust that impacts the way you think about how you impacts the way you think about how you impacts the way you think about how you choose intelligence and how you choose choose intelligence and how you choose choose intelligence and how you choose what kind of trust you give a device. what kind of trust you give a device. what kind of trust you give a device. Now look at Google's role in the broader Now look at Google's role in the broader Now look at Google's role in the broader Apple AI strategy. Yes, it has one Apple AI strategy. Yes, it has one Apple AI strategy. Yes, it has one because Google is helping Apple compete because Google is helping Apple compete because Google is helping Apple compete for that relationship. Isn't that for that relationship. Isn't that for that relationship. Isn't that ironic? Apple says its latest family of ironic? Apple says its latest family of ironic? Apple says its latest family of foundation models was customuilt in foundation models was customuilt in foundation models was customuilt in collaboration with Google and that collaboration with Google and that collaboration with Google and that includes the models running on device. includes the models running on device. includes the models running on device. So this relationship with Google extends So this relationship with Google extends So this relationship with Google extends into the local AI capability we've been into the local AI capability we've been into the local AI capability we've been talking about in this video as well as talking about in this video as well as talking about in this video as well as models in the cloud. But Google's also a models in the cloud. But Google's also a models in the cloud. But Google's also a friendmy. Google wants you using Gemini friendmy. Google wants you using Gemini friendmy. Google wants you using Gemini directly. The pitch for Pixel includes directly. The pitch for Pixel includes directly. The pitch for Pixel includes help across apps. It includes relevant help across apps. It includes relevant help across apps. It includes relevant info appearing during what you're info appearing during what you're info appearing during what you're already doing. some of the stuff we've already doing. some of the stuff we've already doing. some of the stuff we've talked about like a friend asks about a talked about like a friend asks about a talked about like a friend asks about a trip and the booking details appear.

trip and the booking details appear. trip and the booking details appear. Google already has Gmail and photos and Google already has Gmail and photos and Google already has Gmail and photos and search and the information people can search and the information people can search and the information people can choose to connect to Gemini. It has its choose to connect to Gemini. It has its choose to connect to Gemini. It has its own route to understanding what a person own route to understanding what a person own route to understanding what a person needs that nobody else had us. And that needs that nobody else had us. And that needs that nobody else had us. And that matters because Apple isn't competing matters because Apple isn't competing matters because Apple isn't competing with a model company that has no with a model company that has no with a model company that has no relationship with the user. Google can relationship with the user. Google can relationship with the user. Google can challenge Apple on the personal context challenge Apple on the personal context challenge Apple on the personal context that makes an assistant useful and at that makes an assistant useful and at that makes an assistant useful and at the same time it can help Apple improve the same time it can help Apple improve the same time it can help Apple improve Siri. Those two positions create a Siri. Those two positions create a Siri. Those two positions create a unique tension for Google and they are unique tension for Google and they are unique tension for Google and they are absolutely not always pulling in the absolutely not always pulling in the absolutely not always pulling in the same direction and Google's very used to same direction and Google's very used to same direction and Google's very used to negotiating that kind of stakeholder negotiating that kind of stakeholder negotiating that kind of stakeholder challenge. If you end up choosing challenge. If you end up choosing challenge. If you end up choosing Gemini, Google gets the direct AI Gemini, Google gets the direct AI Gemini, Google gets the direct AI relationship. If you end up choosing relationship. If you end up choosing relationship. If you end up choosing Siri, Google's technology can still be Siri, Google's technology can still be Siri, Google's technology can still be part of the experience through Apple. So part of the experience through Apple. So part of the experience through Apple. So helping Apple gives Google a win-win. It helping Apple gives Google a win-win. It helping Apple gives Google a win-win. It gives Google another position in the gives Google another position in the gives Google another position in the market. It's hard to lose when you're market. It's hard to lose when you're market. It's hard to lose when you're winning on every hand. But an iPhone winning on every hand. But an iPhone winning on every hand. But an iPhone owner who becomes more loyal to Siri may owner who becomes more loyal to Siri may owner who becomes more loyal to Siri may have less reason to open Gemini for the have less reason to open Gemini for the have less reason to open Gemini for the job. So Google can gain whitelabeled job. So Google can gain whitelabeled job. So Google can gain whitelabeled adoption for its tech while Apple earns adoption for its tech while Apple earns adoption for its tech while Apple earns the customer's trust. See how we keep the customer's trust. See how we keep the customer's trust. See how we keep coming back to customer trust all the coming back to customer trust all the coming back to customer trust all the way through this video? That's the game.

way through this video? That's the game. way through this video? That's the game. Now there's also a possible shared Now there's also a possible shared Now there's also a possible shared interest here. If Apple becomes a interest here. If Apple becomes a interest here. If Apple becomes a compelling place to do more with AI, compelling place to do more with AI, compelling place to do more with AI, Open AI has a harder job persuading you Open AI has a harder job persuading you Open AI has a harder job persuading you to move your working life into its to move your working life into its to move your working life into its product. And that's my reading of some product. And that's my reading of some product. And that's my reading of some of the competitive incentives that are of the competitive incentives that are of the competitive incentives that are going on here and how AI is weaving into going on here and how AI is weaving into going on here and how AI is weaving into Apple strategy. Apple and Google can Apple strategy. Apple and Google can Apple strategy. Apple and Google can benefit from each other's strengths benefit from each other's strengths benefit from each other's strengths while continuing to compete over who you while continuing to compete over who you while continuing to compete over who you ask first. And that is ironically a more ask first. And that is ironically a more ask first. And that is ironically a more natural alliance right now than Apple natural alliance right now than Apple natural alliance right now than Apple and Open AAI because Open AI has open and Open AAI because Open AI has open and Open AAI because Open AI has open hardware ambition. So end of the day, hardware ambition. So end of the day, hardware ambition. So end of the day, this is a much more complicated contest this is a much more complicated contest this is a much more complicated contest than Apple catching up to the labs. than Apple catching up to the labs. than Apple catching up to the labs. Apple can use a rivals intelligence to Apple can use a rivals intelligence to Apple can use a rivals intelligence to defend its own place in personal defend its own place in personal defend its own place in personal computing. Google, meanwhile, can computing. Google, meanwhile, can computing. Google, meanwhile, can participate inside Apple's product while participate inside Apple's product while participate inside Apple's product while building an alternative to it. Open AI building an alternative to it. Open AI building an alternative to it. Open AI is put on notice to make its own agent is put on notice to make its own agent is put on notice to make its own agent useful enough that you would choose it useful enough that you would choose it useful enough that you would choose it despite the capability already being despite the capability already being despite the capability already being made available through companies you use made available through companies you use made available through companies you use in touch every day. And they still have in touch every day. And they still have in touch every day. And they still have to launch their device. And then you get to launch their device. And then you get to launch their device. And then you get to Nvidia. Apple's most demanding model to Nvidia. Apple's most demanding model to Nvidia. Apple's most demanding model can run on Nvidia GPUs in Google Cloud can run on Nvidia GPUs in Google Cloud can run on Nvidia GPUs in Google Cloud through private cloud compute. Apple can through private cloud compute. Apple can through private cloud compute. Apple can handle more work locally and still handle more work locally and still handle more work locally and still create demand for Jensen's GPUs and create demand for Jensen's GPUs and create demand for Jensen's GPUs and difficult work in the cloud. And so difficult work in the cloud. And so difficult work in the cloud. And so those things grow together. Again, those things grow together. Again, those things grow together. Again, Nvidia just finds a way to win. And the Nvidia just finds a way to win. And the Nvidia just finds a way to win. And the customer is only ever going to see customer is only ever going to see customer is only ever going to see Apple's name on the bill. The company Apple's name on the bill. The company Apple's name on the bill. The company supplying the computation. The company

supplying the computation. The company supplying the computation. The company selling the complete experience. They're selling the complete experience. They're selling the complete experience. They're earning their money in different ways. earning their money in different ways. earning their money in different ways. And that's how corporate alliances work. And that's how corporate alliances work. And that's how corporate alliances work. Now, look at the fine print in Apple's Now, look at the fine print in Apple's Now, look at the fine print in Apple's iPhone 18 Pro announcement because Apple iPhone 18 Pro announcement because Apple iPhone 18 Pro announcement because Apple has given us something very specific has given us something very specific has given us something very specific about how that bill I mentioned actually about how that bill I mentioned actually about how that bill I mentioned actually splits out because it says certain splits out because it says certain splits out because it says certain features that rely on serverside models features that rely on serverside models features that rely on serverside models will have daily usage limits and the will have daily usage limits and the will have daily usage limits and the examples include Siri AI, intelligent examples include Siri AI, intelligent examples include Siri AI, intelligent photo editing, image playground, and photo editing, image playground, and photo editing, image playground, and cloud models and shortcuts. It also says cloud models and shortcuts. It also says cloud models and shortcuts. It also says expanded access will be available for a expanded access will be available for a expanded access will be available for a fee in the future. The announcement fee in the future. The announcement fee in the future. The announcement doesn't give that future access a price doesn't give that future access a price doesn't give that future access a price yet, but you can guess. Apple also lists yet, but you can guess. Apple also lists yet, but you can guess. Apple also lists daily limits for live rewind and Siri daily limits for live rewind and Siri daily limits for live rewind and Siri recap on the watch. Think about the recap on the watch. Think about the recap on the watch. Think about the position this creates for Apple. You buy position this creates for Apple. You buy position this creates for Apple. You buy a powerful device, you do more work a powerful device, you do more work a powerful device, you do more work locally. The everyday experience gives locally. The everyday experience gives locally. The everyday experience gives you a reason to keep using it. When you you a reason to keep using it. When you you a reason to keep using it. When you need capability beyond what's on this need capability beyond what's on this need capability beyond what's on this phone, Apple has an opportunity to sell phone, Apple has an opportunity to sell phone, Apple has an opportunity to sell you more. The hardware purchase and the you more. The hardware purchase and the you more. The hardware purchase and the recurring AI relationship can belong to recurring AI relationship can belong to recurring AI relationship can belong to the same company. And that is how Apple the same company. And that is how Apple the same company. And that is how Apple starts to earn that 20 buck AI starts to earn that 20 buck AI starts to earn that 20 buck AI subscription fee. Google can help supply subscription fee. Google can help supply subscription fee. Google can help supply the intelligence. Nvidia can supply some the intelligence. Nvidia can supply some the intelligence. Nvidia can supply some of the computing. Apple can provide the of the computing. Apple can provide the of the computing. Apple can provide the experience, tell you what's included, experience, tell you what's included, experience, tell you what's included, and offer expanded access for a price.

and offer expanded access for a price. and offer expanded access for a price. The bill will tell you why this The bill will tell you why this The bill will tell you why this arrangement could be attractive to arrangement could be attractive to arrangement could be attractive to Apple. And no, I don't know that it's 20 Apple. And no, I don't know that it's 20 Apple. And no, I don't know that it's 20 bucks, but hey, that's the standard bucks, but hey, that's the standard bucks, but hey, that's the standard price for AI. I wouldn't be surprised. price for AI. I wouldn't be surprised. price for AI. I wouldn't be surprised. So, Apple's in a position to benefit So, Apple's in a position to benefit So, Apple's in a position to benefit from other companies advances while from other companies advances while from other companies advances while keeping the experience and commercial keeping the experience and commercial keeping the experience and commercial relationship with you, the consumer. And relationship with you, the consumer. And relationship with you, the consumer. And so Apple can help you become less so Apple can help you become less so Apple can help you become less dependent on a frontier lab and still dependent on a frontier lab and still dependent on a frontier lab and still want to become the company you depend on want to become the company you depend on want to become the company you depend on for AI. Think about what happens as the for AI. Think about what happens as the for AI. Think about what happens as the models keep improving. Apple can make models keep improving. Apple can make models keep improving. Apple can make its experience more and more useful with its experience more and more useful with its experience more and more useful with capability developed elsewhere while capability developed elsewhere while capability developed elsewhere while continuing to sell you the complete continuing to sell you the complete continuing to sell you the complete product. That helps explain why being product. That helps explain why being product. That helps explain why being behind at models doesn't necessarily behind at models doesn't necessarily behind at models doesn't necessarily mean losing the business built on those mean losing the business built on those mean losing the business built on those models. Another company's progress can models. Another company's progress can models. Another company's progress can end up strengthening the Apple end up strengthening the Apple end up strengthening the Apple experience as long as Apple keeps experience as long as Apple keeps experience as long as Apple keeps earning the customer's trust. We're back earning the customer's trust. We're back earning the customer's trust. We're back to trust again. Now, let's take OpenAI's to trust again. Now, let's take OpenAI's to trust again. Now, let's take OpenAI's argument for a minute because the next argument for a minute because the next argument for a minute because the next level of agent capability might make the level of agent capability might make the level of agent capability might make the whole fight I outlined much, much harder whole fight I outlined much, much harder whole fight I outlined much, much harder for Apple because the labs are betting for Apple because the labs are betting for Apple because the labs are betting that they can do enough valuable work that they can do enough valuable work that they can do enough valuable work that people are going to happily pay for that people are going to happily pay for that people are going to happily pay for it regardless of device. Even when those it regardless of device. Even when those it regardless of device. Even when those people already own really powerful Apple people already own really powerful Apple people already own really powerful Apple machines, if the agent takes a huge job machines, if the agent takes a huge job machines, if the agent takes a huge job off your hands, the recurring bill you off your hands, the recurring bill you off your hands, the recurring bill you could charge for that would be something could charge for that would be something could charge for that would be something you'd be willing to pay. Let's go back you'd be willing to pay. Let's go back you'd be willing to pay. Let's go back to that reservation number. Getting it to that reservation number. Getting it to that reservation number. Getting it onto your screen is useful. Now, suppose

onto your screen is useful. Now, suppose onto your screen is useful. Now, suppose an agent could work through that whole an agent could work through that whole an agent could work through that whole trip for you. Let's suppose an agent trip for you. Let's suppose an agent trip for you. Let's suppose an agent could compare the options against your could compare the options against your could compare the options against your busy schedule, check the cancellation busy schedule, check the cancellation busy schedule, check the cancellation rules, notice the conflict you missed, rules, notice the conflict you missed, rules, notice the conflict you missed, come back with a plan ready for approval come back with a plan ready for approval come back with a plan ready for approval that accommodates all of that. That's a that accommodates all of that. That's a that accommodates all of that. That's a much larger amount of work. It's an EA much larger amount of work. It's an EA much larger amount of work. It's an EA sized amount of work. If it did happen sized amount of work. If it did happen sized amount of work. If it did happen reliably, you might pay for it. At the reliably, you might pay for it. At the reliably, you might pay for it. At the very least, you would feel more very least, you would feel more very least, you would feel more comfortable trusting it. Those are the comfortable trusting it. Those are the comfortable trusting it. Those are the kinds of outcomes the labs need to kinds of outcomes the labs need to kinds of outcomes the labs need to deliver reliably to justify a much deliver reliably to justify a much deliver reliably to justify a much bigger recurring relationship with you. bigger recurring relationship with you. bigger recurring relationship with you. And by reliably, I mean nearly 100% of And by reliably, I mean nearly 100% of And by reliably, I mean nearly 100% of the time. That's the bar. A provider can the time. That's the bar. A provider can the time. That's the bar. A provider can keep upgrading the model and make more keep upgrading the model and make more keep upgrading the model and make more computing available and keep work computing available and keep work computing available and keep work running on its own machines. And some of running on its own machines. And some of running on its own machines. And some of that is useful, but those larger that is useful, but those larger that is useful, but those larger promises need to be proved at scale to promises need to be proved at scale to promises need to be proved at scale to really unlock value for consumers. If really unlock value for consumers. If really unlock value for consumers. If the capability improves enough, we the capability improves enough, we the capability improves enough, we customers may decide the best place for customers may decide the best place for customers may decide the best place for our work is wherever that agent operates our work is wherever that agent operates our work is wherever that agent operates and Apple will still have to compete in and Apple will still have to compete in and Apple will still have to compete in that larger landscape. And so, OpenAI that larger landscape. And so, OpenAI that larger landscape. And so, OpenAI can bet on the scaling laws here. Open can bet on the scaling laws here. Open can bet on the scaling laws here. Open AI can also work through local files and AI can also work through local files and AI can also work through local files and applications in your computer as it applications in your computer as it applications in your computer as it already does. Apple can use the cloud already does. Apple can use the cloud already does. Apple can use the cloud while open AI can reach in to work on while open AI can reach in to work on while open AI can reach in to work on the device. There can be different the device. There can be different the device. There can be different perspectives there. Ultimately, you are perspectives there. Ultimately, you are perspectives there. Ultimately, you are going to care about which system keeps going to care about which system keeps going to care about which system keeps your work together, remembers enough to your work together, remembers enough to your work together, remembers enough to help, and earns your trust when you need help, and earns your trust when you need help, and earns your trust when you need something done. You're not going to care

something done. You're not going to care something done. You're not going to care about the details, at least not for most about the details, at least not for most about the details, at least not for most consumers. And that is the risk for consumers. And that is the risk for consumers. And that is the risk for Apple. It can sell an excellent phone to Apple. It can sell an excellent phone to Apple. It can sell an excellent phone to someone who spends way more ultimately someone who spends way more ultimately someone who spends way more ultimately on another company's agent because the on another company's agent because the on another company's agent because the agent is so valuable to their work in agent is so valuable to their work in agent is so valuable to their work in life. It's also why I would not dismiss life. It's also why I would not dismiss life. It's also why I would not dismiss a hardware strategy. If Apple does make a hardware strategy. If Apple does make a hardware strategy. If Apple does make more of the work really practical inside more of the work really practical inside more of the work really practical inside the experience you use, it can become the experience you use, it can become the experience you use, it can become harder for most people to justify moving harder for most people to justify moving harder for most people to justify moving that work elsewhere. useful local that work elsewhere. useful local that work elsewhere. useful local capability gives Apple something really capability gives Apple something really capability gives Apple something really concrete to build that case around and concrete to build that case around and concrete to build that case around and that's right out of turn's chips that's right out of turn's chips that's right out of turn's chips division. So my assessment is that Apple division. So my assessment is that Apple division. So my assessment is that Apple now has at least a credible path to now has at least a credible path to now has at least a credible path to keeping personal AI centered on devices keeping personal AI centered on devices keeping personal AI centered on devices and this launch makes that path very and this launch makes that path very and this launch makes that path very very clear and concrete. Google and very clear and concrete. Google and very clear and concrete. Google and Nvidia's involvement can help it deliver Nvidia's involvement can help it deliver Nvidia's involvement can help it deliver that capability. And the larger that capability. And the larger that capability. And the larger interface, the additional compute interface, the additional compute interface, the additional compute ultimately give developers room to work ultimately give developers room to work ultimately give developers room to work with to evolve the Apple experience. with to evolve the Apple experience. with to evolve the Apple experience. Apple's own fine print though shows it Apple's own fine print though shows it Apple's own fine print though shows it is prepping to sell you intelligence is prepping to sell you intelligence is prepping to sell you intelligence through that relationship. So you should through that relationship. So you should through that relationship. So you should be ready for that. Those are all be ready for that. Those are all be ready for that. Those are all connected parts of a new serious connected parts of a new serious connected parts of a new serious competitive AI strategy. I expect competitive AI strategy. I expect competitive AI strategy. I expect Turnis' Apple to build in this Turnis' Apple to build in this Turnis' Apple to build in this direction. more responsive voice, a less direction. more responsive voice, a less direction. more responsive voice, a less irritating Siri start people asking irritating Siri start people asking irritating Siri start people asking again. More capable applications can again. More capable applications can again. More capable applications can give them reasons to keep going and give them reasons to keep going and give them reasons to keep going and trusting the AI with more. And then next trusting the AI with more. And then next trusting the AI with more. And then next uses people discover can make the device uses people discover can make the device uses people discover can make the device itself more valuable than the examples itself more valuable than the examples itself more valuable than the examples that even Apple can show us today.

that even Apple can show us today. that even Apple can show us today. That's the part I'm really interested That's the part I'm really interested That's the part I'm really interested in. It still has to unfold. It still has in. It still has to unfold. It still has in. It still has to unfold. It still has to happen. But Apple is putting real to happen. But Apple is putting real to happen. But Apple is putting real muscle and capacity behind the local AI muscle and capacity behind the local AI muscle and capacity behind the local AI opportunity. Look, I expect it's Apple. opportunity. Look, I expect it's Apple. opportunity. Look, I expect it's Apple. A lot of us are going to buy more local A lot of us are going to buy more local A lot of us are going to buy more local compute and we're going to pay for compute and we're going to pay for compute and we're going to pay for Frontier capability. And the important Frontier capability. And the important Frontier capability. And the important decision that we all are going to make decision that we all are going to make decision that we all are going to make is what each system is responsible for. is what each system is responsible for. is what each system is responsible for. Your files, your preferences, your Your files, your preferences, your Your files, your preferences, your working habits are going to accumulate working habits are going to accumulate working habits are going to accumulate around the places that you rely on. Who around the places that you rely on. Who around the places that you rely on. Who do you trust? Moving a subscription is do you trust? Moving a subscription is do you trust? Moving a subscription is easy compared with rebuilding an easy compared with rebuilding an easy compared with rebuilding an experience you've spent months making experience you've spent months making experience you've spent months making useful. So the bill you pay matters useful. So the bill you pay matters useful. So the bill you pay matters because it grows out of a much larger because it grows out of a much larger because it grows out of a much larger trust choice about where your computing trust choice about where your computing trust choice about where your computing life is going to belong. Apple wants its life is going to belong. Apple wants its life is going to belong. Apple wants its devices and software to remain really devices and software to remain really devices and software to remain really central for you. Open AAI wants you to central for you. Open AAI wants you to central for you. Open AAI wants you to keep choosing the agent. Google has ways keep choosing the agent. Google has ways keep choosing the agent. Google has ways to participate and win through Apple and to participate and win through Apple and to participate and win through Apple and through its own Gemini assistant. And of through its own Gemini assistant. And of through its own Gemini assistant. And of course, Nvidia is just going to keep course, Nvidia is just going to keep course, Nvidia is just going to keep winning. None of those positions winning. None of those positions winning. None of those positions guarantees a customer relationship.

guarantees a customer relationship. guarantees a customer relationship. Apple, OpenAI, Anthropic, and others Apple, OpenAI, Anthropic, and others Apple, OpenAI, Anthropic, and others have to keep earning it from people have to keep earning it from people have to keep earning it from people deciding where to put their next piece deciding where to put their next piece deciding where to put their next piece of work. How much of your computing life of work. How much of your computing life of work. How much of your computing life are you comfortable renting? And what are you comfortable renting? And what are you comfortable renting? And what would an AI have to do to earn that would an AI have to do to earn that would an AI have to do to earn that bill? I want to hear your answer in the bill? I want to hear your answer in the bill? I want to hear your answer in the comments. I want to hear if Apple has comments. I want to hear if Apple has comments. I want to hear if Apple has earned more of your trust because of earned more of your trust because of earned more of your trust because of this or if you're looking at Apple more this or if you're looking at Apple more this or if you're looking at Apple more seriously or maybe less seriously. I'll seriously or maybe less seriously. I'll seriously or maybe less seriously. I'll see you next time. Let me know. Cheers.