Apple on Thursday released quarterly results that beat expectations, showing revenue of $143.8 billion, up 16% from a year earlier. As analysts peppered CEO Tim Cook with softball questions at Apple’s earnings conference, one analyst dared to ask a question no one in Silicon Valley would want to ask.
“Given your company’s AI efforts, it’s clear that there are additional costs associated with it…Many of your competitors are already integrating AI into their devices, but it’s not yet clear what incremental monetization they’re seeing because of AI…” began Morgan Stanley’s Eric Woodring.
Is there a hint of nervousness beneath this financier’s supposedly very financial exterior? In what I can only imagine was an extraordinary display of courage, Woodring asked a question that lurks only in the darkest, wettest corners of investors’ minds.
“So how do we monetize AI?” he asked.
You’d think we’d see more of this. That would be a mistake. Instead, Big Tech is taking a largely vibe-driven approach to AI development. For example, OpenAI may seem to be on top of the world, given how ChatGPT is embedded in the cultural consciousness. However, the company has no plans to become profitable until 2030. HBSC analysts are skeptical even of that timeline, especially since they estimate it will require an additional $207 billion in funding. Ask anyone in technology how they plan to break even for OpenAI, and you’ll likely hear the equivalent of the “￣\_(ツ)_/￣” emoji.
But good ol’ Tim “$143.8 Billion in Revenues” Cook was having a good afternoon, so maybe he’ll finally spill the beans on how these companies plan to recoup their investments.
His answer was disappointing.
“Well, I’ll tell you, we’re bringing intelligence to things that people like, and we’re integrating intelligence across operating systems in a personal and private way. I think that’s going to create a lot of value, and it’s going to open up a lot of opportunities across our products and services,” Cook said.
So, folks, that’s it. Apple will monetize AI by creating “significant value.” And importantly, it will “open up a range of opportunities”. We will experience this through our products and services. nice!
Well, thank you to that guy at Morgan Stanley for his efforts.
