Apple shares hit record high on back of new AI tools

Apple shares rose to a record after it took the wraps off long-awaited new artificial intelligence features, betting that a personalised and understated approach to the technology will win over customers.

Its shares gained 7.3 per cent to $207.15 (€192.68), marking their first record high of the year. Investors initially had a tepid reaction to the event, with the stock price virtually unchanged in premarket trading – a not-uncommon reaction when Apple debuts long-anticipated new features. Shares of some key Apple suppliers, meanwhile, sank overnight.

A new AI platform called Apple Intelligence was the highlight of the company’s Worldwide Developers Conference presentation on Monday, which also included updates to the iPhone maker’s operating systems.

The technology will help summarise text, create original images and retrieve the most relevant data when users need it. The push also includes a revamped version of Siri, the company’s once-pioneering digital assistant.

Apple is making a high-stakes bid to catch up with rivals in the booming AI market. After falling behind tech peers like Alphabet’s Google and Microsoft, the company is counting on a streamlined interface – and loyal customer base – to regain ground.

“This is a moment we’ve been working toward for a long time,” senior vice president Craig Federighi, who oversees software engineering, said at the event. He described Apple Intelligence as “AI for the rest of us,” alluding to an old slogan about the Mac computer.

Apple formally announced a partnership with OpenAI, which Bloomberg reported on before the event. This will let customers access ChatGPT via Siri at no extra cost. Apple Intelligence will begin rolling out later this year, but some features – including the ability for Siri to precisely control features within apps – will not come until next year. Support for languages beyond English also will not arrive until later.

Though Apple had an early lead in AI after it launched Siri in 2011, its technology was quickly overtaken by the Google Assistant and Amazon’s Alexa. Then AI took another giant leap forward when OpenAI’s ChatGPT arrived at the end of 2022.

That led to a flurry of other services, including ones from Google, Microsoft and Meta Platforms Samsung Electronics – Apple’s biggest smartphone rival – also integrated Google AI features into its devices earlier this year.

Apple chief executive Tim Cook is now under pressure to show that the iPhone maker can lead again. The company also is contending with a broader sales slump. Revenue declined in five of the past six quarters in the face of sluggish smartphone demand and a slowdown in China.

On Monday, Mr Cook said AI would be “the next big step for Apple.” Though the company will not make money directly on the new features, the aim is to make users more loyal and prod them to upgrade more frequently.

“We think Apple Intelligence is going to be indispensable to the products that already play such an integral role in our lives,” he said. – Bloomberg