While big tech burns cash on AI, Apple waits

Bonfire of the Tech Vanities

But consider an alternative reading. The foundation model market is beginning to exhibit classic signs of commoditisation. When one company introduces agentic capabilities, the others follow within months. Benchmark leadership changes constantly, with no provider establishing a durable lead. Prices are collapsing: Anthropic recently cut prices by 67%, Google has slashed rates by 70%-80%, and OpenAI has repeatedly reduced costs on successive models. This is textbook commodity market behaviour.

If foundation models are heading toward commodity status, then the strategic value shifts to whoever controls the integration layer and the user relationship. Apple has 2.4 billion active devices. It has the most valuable distribution channel in technology. And its recent moves suggest a deliberate strategy: rather than building frontier models, source them from whoever is best at any given moment.

This is precisely what Apple has done. It partnered with OpenAI in 2024, then switched to Google’s Gemini to power the next generation of Siri. The company is not building the engine; it is curating the best available engine at any given moment, wrapping it in Apple’s privacy architecture, and integrating it across the ecosystem. Own the experience, outsource the commodity.

Source: stocks.apple.com

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