Apple exceeded expectations in published its quarterly results Thursday, revealing that it had revenue of $143.8 billion, an increase of 16% year-over-year. As analysts bombarded CEO Tim Cook with softball questions during Apple’s earnings conference call, one analyst dared to ask the question that apparently no one in Silicon Valley is willing to ask.
“When I think about your AI initiatives, you know, it’s clear that there are additional costs…A lot of your competitors have already integrated AI into their devices, and it’s not yet clear what incremental monetization they’re seeing through AI…” began Morgan Stanley’s Erik Woodring.
Could there be a tinge of nervousness beneath this finance man’s probably very financial facade? In what I imagine was a Herculean display of courage, Woodring asked the question that only lurks in the darkest, dankest corners of investors’ minds.
“So how do we monetize AI? » he asked.
You’d think it would come up more. You would be wrong. Instead, Big Tech has adopted a largely vibration-focused approach to AI development. Take OpenAI, for example, which may seem like it’s on top of the world, given how ChatGPT has embedded itself in the cultural consciousness. But the company does not intend to make money until 2030. HBSC analysts even doubt this timeline, especially since an estimated $207 billion in additional funding will be needed. Ask anyone in tech how OpenAI plans to break even, and you’ll encounter the verbal equivalent of the ¯\_(ツ)_/¯ emoticon.
But good ol’ Tim “$143.8 billion in revenue” Cook was having a good afternoon, so maybe he’ll finally come clean about how each of these companies plans to recoup their investments.
His response was disappointing.
“Well, let me just say that we’re bringing intelligence to more of what people love, and we’re building it into the operating system in a personal and private way, and I think in doing that it creates great value, and it opens up a range of opportunities across our products and services,” Cook said.
So there you have it, friends. Apple will monetize AI by creating “great value.” And most importantly, it will “open up a range of opportunities”. What we will experience in “products and services”. Cool!
Well, thanks to this guy at Morgan Stanley for trying.
