Apple over the past couple of years has been aggressively acquiring smaller AI companies as it looks to better compete with such companies as Google, Microsoft, and Amazon, and reportedly made another deal last month when it bought DarwinAI.

Bloomberg reported that Apple in last February bought the Canadian AI startup but did announce the acquisition. The company has kept quiet about the deal even after the report came out, with an Apple spokesperson reportedly tell the news outlet that it sometimes buys smaller organizations but won’t discuss its plans for them.

DarwinAI’s website has been taken down and Alexander Wong, the startup’s co-founder and a professor of AI and computational imaging at the University of Waterloo, became a director of machine learning research at Apple since January, according to his LinkedIn page. Other DarwinAI employees reportedly also have joined Apple.

The startup was developing AI technology designed to visually inspect components during manufacturing to make devices smaller and more efficient.

More AI Coming

Apple apparently was caught a little short when generative AI exploded on the scene with OpenAI’s release 16 months ago of the ChatGPT chatbot and has been working to keep up with the industry’s leaders. This is being done through both in-house development and outside acquisitions. Stocklytics, a company that tracks and analyzes stocks, last month pointed to a report by market research firm Statista showing that Apple outpaced its rivals last year in acquiring AI companies with 32, with Google being a distant second at 21 and Meta and Microsoft coming with 18 and 17, respectively.

The focus for Apple appears to be smaller companies that fill particular gaps.

“In the ongoing AI arms race, Apple is making sizeable deals with many AI startups, putting it in a good spot for future tech developments even as its competitors, Microsoft and Google, make considerable investments in already established AI companies,” Edith Reads, Stocklytics financial analyst, said in the report. “By acquiring promising AI startups, Apple gains access to top-tier talent and innovative technologies and consolidates its foothold in crucial AI domains, ensuring a competitive edge in the rapidly evolving tech landscape.”

While he hasn’t talked in great detail, Apple CEO Tim Cook for the past several months has been promising to bring a range of new AI technologies to the company’s mobile product and services portfolio. Cook in February said during a call to discuss quarterly earnings that Apple later this year will continue to invest in generative AI and will talk more about its “ongoing work in that space.”

AI and iOS 18

There have been reports about possible AI-based features that will be in the upcoming iOS 18 operating system, including a more intelligent version of Siri that leverages large-language models (LLMs) like those that underpin such tools such as ChatGPT and Google’s Gemini, AI functionality for Apple Music, and Xcode AI capabilities that let it complete blocks of code and test software.

How all this will help Apple in the highly competitive generative AI space remains to be seen. Researchers with Stocklytics noted that Apple continues to add AI and machine learning capabilities to its hardware and software, but pointed to Google and Samsung – which keeps adding AI to its Android-based Galaxy devices – as companies that are moving faster.

They also said Apple has invested more in equity and add-ons than Microsoft or Google parent company Alphabet have since 2017.

Business is Booming

Analysts with ABI Research are predicting that about 110 million of the smartphones will ship with on-device generative AI capabilities this year, and that by the end of the decade, 90% of smartphones in 2030 will have on-device generative AI. It not only will enhance the user experience but also address a growing demand among enterprises for greater data security by running AI workloads on their own systems.

IDC analysts are even more ambitious. They said in a blog post in February that about 170 million next-generation AI smartphones will ship this year, almost 15% of all the smartphone shipments. Last year, about 51 million of such smartphones shipped.

“While AI will impact all device categories, smartphones will lead the charge from a pure reach and volume perspective, quickly outpacing the forecasted volumes of AI PCs,” they wrote. “AI is run on devices for speed of response, privacy, and security. On-device GenAI is newer, and the industry’s discussion of AI smartphones is centered around this.”