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>If you are a consumer and you have a Mac or an iPhone, what do you need from AI that Apple's new offering won't provide? Why would you pay for ChatGPT, or even tolerate its inevitably increasingly desperate ad placements?

Probably the same reason the Gemini app is still well behind ChatGPT in consumer usage and adoption despite being preinstalled on android phones worldwide ? Why are people using GPT on Windows. There's even a copilot button on new keyboards!

Or maybe its the same reason Microsoft Edge is not the most popular Windows browser ? Maybe its the same reason Instagram threads did not even dent Tiktok ?

You are asking the question the wrong way around. People use and like what they like and have a strong preference to continue doing so.

This is just human behaviour. You don't need mind blowing moat. You begin to have problems only when:

- Users are constantly using your product unsatisifed.

- There's a competitor(s) with a significantly better offering that people are talking about.

Will Apple's offering be providing any meaningful/significant benefit over just using GPT ? If not, don't expect any miracles.

> Will Apple's offering be providing any meaningful/significant benefit over just using GPT ? If not, don't expect any miracles.

Judging by the announcements today about its integration into the OSes? They are offering useful things ChatGPT cannot offer unless they write an "everything app".

One can (maybe should) make the argument that this is the browser monopoly again, but given that the USA has seemingly no intention of ever litigating that question again even if the EU does, there are clearly features here that OpenAI is effectively locked out of offering.

Just because Apple said they're 'integrating into the OS' (which can really mean a lot of things) doesn't mean they'll offer something users will actually care about that Open AI can't match.

> that Open AI can't match.

Open AI can match it but at what price?

I don't understand what you are saying here

likely cheaper than buying an apple product

> Apple said they're 'integrating into the OS' (which can really mean a lot of things)

Well, it can mean a lot of things, which is why Apple outlined plenty of specific use-cases and details of what they meant by "integrating into the OS" here.

What did they outline? We had "browser use" for a while now, but it is still way too slow to be usable. Not to mention whatever OS integration they are making.

Windows has been pushing the same thing hard without much success.

Why do I care if AI is integrated into my OS when I can choose my preferred AI and it can use the OS directly?

This.

The other day I wrote up some notes for a presentation. Opened Google Slides, clicked the gemini button, pasted the notes in and asked it to make the slides. Nope; gemini can only modify a single slide at a time in Google Slides.

Pasted the same notes into claude, it wrote a pptx file, I imported that into Slides, job done.

Being integrated into the product doesn't always mean a better result.

Yeah!

Not being integrated can be an advantage because it gives you the freedom to think outside the box.

Meanwhile an AI engineer embedded into an incumbent slide app team has to ask permission and get cross functional alignment for every little feature. And deal with neckbeard tech leads lecturing them on what the right architecture is

That's progress, last time I tried that a month or something ago gemini (the web app) crashed when trying to generate slides.

Well I sure hope that the gemini developers don't have access to agentic development tools because they might read this comment, build the multi slide editing feature using 450M tokens and ship it yesterday removing that Claude edge forever.

I hate that I am defending apple here but Microslop has been pushing a garbage tacked on integration of AI into Windows. By all accounts of the last 20 years of Apple, they are much much better at integrating different services into one fluid system.

I guess, but I haven’t been thrilled by anything apple has released in a long time either. The status quo has just remained unchanged.

That's all true... however the point that Google will get just $1 billion per year from Apple for the AI service is still insightful.

If AI use via Apple represents 10% of the total that vaguely implies that the total AI market is worth around $10 billion per year (which admittedly seems a bit low), and if it is just 1% (which also seems low) then we get $100 billion per year upper-end estimate.

Which just is not enough to justify the current valuations of AI companies.

Uber was recently said to have a $1500 per head per month AI budget (1). Business use dwarfs consumer spend.

(1) https://news.ycombinator.com/item?id=48383056

If AI use via Apple represents 10% of the total that vaguely implies that the total AI market is worth around $10 billion per year (which admittedly seems a bit low), and if it is just 1% (which also seems low) then we get $100 billion per year upper-end estimate.

This is a bizarre way to try and estimate market size.

Maybe Apple’s AI represents 100% of the market! Maybe it represents 0.000001%! We can make up any numbers we want!

Anthropic subscriptions alone already dwarf your $10 billion number.

I admit to not having yet taken a deep dive on Apple's privacy claims (i.e. on device, private cloud etc) but one thing that Apple is going to be providing in this case is an actual privacy commitment that takes into consideration the level of sensitivity of data being uploaded into these AI chat interfaces.

OpenAI's commitment to privacy is absymal relative to the sensitivity of the data people are dumping onto the platform. The CEO also has a reputation for being untrustworthy.

The biggest threat to ChatGPT's moat may be a brilliant marketing campaign by Apple that really gets people thinking about what platform they want to be upload their secrets to.

> There's even a copilot button on new keyboards!

But not because anybody asked for that. It is part of the force feeding so execs can make this exact argument, and pretend that demand is there.

> If you are a consumer and you have a Mac or an iPhone, what do you need from AI that Apple's new offering won't provide

Honestly, I don't think I need anything from AI at all. It's a convenience but it doesn't really enable anything I wasn't doing before. That's probably their biggest problem. The biggest thing is it enables non-coders to write code, but it's very debatable that that's a good thing excluding personal projects

They were not asking for your individual opinion. They were asking why any given person would need it.

It turns out I am any given person

Yep... I've met him and I can confirm that he is in fact, any given person. To that, I might add that I'm in the same situation. AI is a convenience and light entertainment, and as such, I'm willing and ready to pay exactly 0 USD for it privately and in my business. If the price rises beyond this point, they for sure have to move it from convenience to essential and so far, I have not seen any shadow of essential.

You are missing the forest for the trees.

> If you are a consumer and you have a Mac or an iPhone, what do you need from AI that Apple's new offering won't provide?

I've been using Kagi Assistant for my AI needs, and have to say, Siri will probably replace it in the fall. The question will be, will I still want to keep Kagi for search, or will this new Siri get me where I need to be on all fronts? I need to start paying more attention to how often I actually use the search results vs just the AI summary.

There are things I didn't see Apple show and I wonder how Siri will handle it. One example would be basic coding. They mentioned LLMs in Xcode and Siri with the Shortcuts app and Safari Extensions, but I just had Kagi write up a webpage as a means to display a bunch of data it gave me. Gemini could also do this, so maybe it's not a problem for Siri, but it remains to be seen. There is also a question of what the experience will be like. ChatGPT, for example, handles writing up this code is a much nicer way than Kagi Assistant. Kagi feels more like the results I would have had from ChatGPT a couple years ago where it just dumps out the code in a block and any change is an entirely new code dump, meanwhile ChatGPT goes into a coding interface with a live editor. Going to Xcode feels like overkill, Siri will probably be not enough... so that's a gap in the market Apple may not serve. I assume there will be several things like this. The prosumer level of AI usage, if you will.

Very very few consumers will be looking to use an AI to write code for them.

They will, but they won’t realize it’s writing code. It will look like Claude Cowork, which writes code for itself under the hood but is results-oriented for the user.

Co-work is damn near magic. I've been working on a mapping project the past few days, am probably a couple hundred prompts deep in to it (I'm doing some very weird stuff with the data to produce a hybrid map). The processing pipeline is something like 12k lines of python and counting.

those few are the ones shelling out ridiculous money. mom&pop ChatGPT users aren’t their key demographic/users, it is Uber’s with $1.5k/SWE/month budgets

I don’t think what I did would be too uncommon. I asked the LLM to design an exercise program and went back and forth with it a bit. Everything was kind of scattered in the chat and hard to read/find. I asked for a web page to consolidate everything so I could just check it each day and see what to use. It made a single file I can just double-click and open in the browser. It’s infinitely better than what the chat itself would have provided, and much better than telling it to give me a bunch of markdown tables.

I could see the same thing being useful for the ultimate output of a lot of chats. For example, they showed Siri comparing specs for few different products. I used an LLM to do this once as well, but it was comparing 12 things with about 50 attributes. The table was fine, but what was better was asking for a webpage that let me click on the attribute rows I cared about so it could total up each column, which allowed me to easily rank them and better make a decision.

Once it can make html files, it’s a small step to have Siri throw it into iCloud, and make it web accessible. This would be more of a feature than something it would just do, but I could see this being used in the same way Google talked about making dynamic widgets to help explain concepts within Google Search. That’s dynamic coding with an LLM as well, even if people don’t know it. Apple wouldn’t even need to show the code, they could just save it directly to a file and open Safari. That’s essentially what their extension builder will do… write some JavaScript and load it into Safari.

> 2026 consumer revenue projections from OpenAI are pitched at $14-15 billion, apparently. If they get that, it's the only year they will get that

Would you care to wager on that?

Because I would gladly take the other side at even odds.

> consumer AI is worth, to Anthropic

Anthropic does not really care about consumer AI. I expect consumer is where their least profitably customers are.

My primary expectation is that Apple will mostly increase usage of AI by general consumers. To me, this reads like Instagram adding stories. Did it stop Snapchat's growth? Sure. But I would be cautious about claiming it will take too many users away from OpenAI. I think it will be a fairly different product offering.

If you're paying to use ChatGPT right now, you might be using it for hobby coding, projects, or image generation. If you're paying a lot for ChatGPT, you're almost certainly using it for personal programming projects.

The $100/month (and up) subscribers aren't going to churn because of this, and I would be extremely surprised if the $20/month users do in any meaningful way.

> Would you care to wager on that?

I don't gamble. Though you might not be alone taking the bet:

https://www.notus.org/technology/trump-blindsided-ai-compani...

"OpenAI CEO Sam Altman pitched the idea of turning over shares in his company to Trump in early 2025 and discussed the matter again with senior officials in recent weeks"

> Because I would gladly take the other side at even odds.

If you’re only giving even odds you’re not very confident in openAI at all. $15 billion is peanuts.

I don't have to give them better odds then they'll accept

It's a steal at even odds

It's still positive EV at much worse odds but not worth my time

1. They didn’t accept those odds.

2. You can’t know whether it’s worth your time or not since you don’t know how much the wager was for.

If you’re 99% confident, 10:1 odds with a 10x larger bet is still a steal. My guess is your confidence is somewhere just north of 50%.

When I use these models, I honestly can't tell much of a difference between any of the frontier ones. Admittedly I'm not sitting around benchmarking them during the hype cycles, but as a coder I have zero issues switching to whatever's cheapest. Custom harnesses or whatever are not much of a moat (honestly Claude is so buggy right now that I've been using codex and opencode just so I don't have to deal with a flickery mess that screwed up my arrow keys)

I just don't see how being the "premium" provider really works if much cheaper models are basically good enough.

People who use ChatGPT have fed so much data about their own lives and interests into it. This includes a lot of information about personal lives, interests, plans, business and even family! Shifting to another AI app is painful as they would need to start from scratch.

making me glad I always use ChatGPT in an incognito window, guy.

I don’t know anyone who uses ChatGPT who cares about that stuff. Most people just use it as a Google replacement.

I actively hate it when it brings in some nonsense it thinks it knows about me. I told it my income once in an attempt to use it to find the perfect rewards credit card mix. Now anytime I try to get it to search for a deal it brings up some nonsense about “as a high income individual you don’t worry about saving $X, you care more about reliability, so you don’t need to look for the lowest cost” or something similar.

Turn off the "memory" feature in the settings. It just rots the context anyways.

there is the option to opt-out of personalization, opt-out of using your conversations for training, and in that process reduce or eliminate any memory the system has of your personal preferences and context. If these actions don't erode your particular use-cases for ChatGPT, and if you think you can trust the model to follow these options this might be of use. I'm not trying to say "you're using it wrong" but that taking a more active control of the instaces facing you as a user might be of some benefit.

I have iterated through different option configurations to reach a level of 'customization' that more or less conforms to my own use case, and this does include opting out of any and all lasting memory between instances and across chat sessions; and adds a selection of single initialization prompts which shape the chatbot's behavior to my requirements for that session's objective. these trim most if not all af the sycophantic interactions, reduce outputs to the specific formats and contours as defined and omits any of the 'explanations of the underlying reasons behind...' which is just noise. This also has enabled some pretty useful results without ever spending a dime on a paid account: the premium behavior presented to 'potential customers' as a lure continues to work for me, and for iteration across instances and accounts is possible with machine-ready yaml context file when a single sessions hits the 90% wall : one emit and ingest cycle rotation across account profiles in firefox and i pick right up with a fresh limit.

Bouncing between ChatGPT and Claude, and between models for discrete subsets of larger tasks has really been impactful for my particular needs; but as i am not working in regions of knowledge that are beyond my own expertise and because I require the model to limit responses to very specific parameters, the logic space for unchecked hallucinations is low (but not zero).

The most useful project results for me have been in developing an air-gapped private menagerie of multi-domain models which uses an operating structure not dissimilar to OpenMythos; but then my background includes HPC environment development for NUMA, unikernels, MPI and bare metal hypervisor design - so getting a design plan and functional code without requiring a team of programmers and months of time in order to even start using models under my control which have zero public facing risk for the projects i'm working on is a much better place to spend limited budget on. Last gen hardware in the V100 class is perfectly capable of running and delivering the physics calculation optimizations as required and I would rather buy and/or install solar+storage to supply the electricity for token generation than rent the same from any of the frontier models AND trust that "don't train and learn from me" preferences are and continue to be followed.

If your use-case is a a 'lifestyle shopping assistant' then just turning off customization might be sufficient to stop it from telling you how to live your best life.

Let's imagine for a second that this a few billion dollars per year to Google is correct. Why do you assume that it covers everything to be done by Google itself - from hosting to running actual servers? Apple may very well pay Google a licensing fee, take a trained LLM and run inference themselves locally or even at a yet another 3rd party for example a datacenter corporation or any mix of these. And then a true real cost of running just the inference on every Apple device would be separated into a completely different org payment flows, very obscured and higher than just a license fee.

I'm not saying that this is what really happens. I'm saying that believing a CEO is as foolish and as grounded in reality as believing Ed Zitron.

> Why do you assume that it covers everything to be done by Google itself - from hosting to running actual servers?

I don't, and that's the point, isn't it?

It's the keys to a substantial chunk of the kingdom for $1B a year. Literally they are getting, for a very small price, the right to distill their own models from Gemini.

Is there money in this for someone with a data centre? Possibly. Is there money in it for NVIDIA? Possibly.

But either way, that's not OpenAI or Anthropic, is it?

> It's the keys to a substantial chunk of the kingdom for $1B a year. Literally they are getting, for a very small price, the right to distill their own models from Gemini.

Here is a different interpretation: Apple bought the rights to distill and use a smaller version of one unspecified model in the Gemini family (there are many such models).

The distillation will be carried out at Google's data centres so that the original weights never leave Google premises.

For this to be keys to be kingdom it would need to cover all current and future models and would need to be very permissive with regards to distillation parameters and allowed uses of the distilled model.

I expect the reality to be somewhere between these two extremes.

I expect that a lot of the money will be in Enterprise AI.

Right but OpenAI are for real making that prediction about their consumer revenue, which seems decidedly ambitious (considering that they are making nothing from their current phone placement). And they have said that they expect it to be quite a large share!

https://mlq.ai/news/openai-projects-over-280-billion-revenue...

"OpenAI projects revenue will be divided nearly equally between its consumer and enterprise business units by 2030"

That it is so absurdly ambitious and so likely to run up against reality strikes me as really indicative of the quality of the envelopes these calculations are being sketched on.

Fidji Simo had to take medical leave so they're behind on their advertising platform. But in principle that could make a ton of money.

I think OpenAI is just getting beaten so badly in the Enterprise space that they have to make rosy predictions about the consumer space.

I think so too (Enterprise), but I think its going to look different from "Pay subscription for access to a model from OpenAI/Anthropic/Google."

I don't think people will be doing business with the labs directly. "Enterprise AI" will be distilled down into purpose built products, with the model just basically being a generic commodity, and nearly irrelevant to the enterprises buying whatever these products are much like how I don't care if whatever SaaS was built in React, Vue, or some other framework as long as it works.

Ironically, for as much shit as they get about Copilot, Microsoft I think has the right idea for the long game they just suck at execution. Copilot is the tool, integrated into the rest of their enterprise stack, it doesn't care what the model is behind the scenes (they already offer you the ability to choose between different models).

That doesn't really bode well for the labs and their trillion dollar IPOs, because they are effectively reduced down to being a developer framework.

The free Chinese models are always approaching frontier-level power. The cost to Enterprise to run these models is where Anthropic and OpenAI are competing against in the long run.

That's cool, but the enterprise is cheap. If you have any proximity to sales in the space you know that procurement and lawyers exist that have a full time job redlining purchase orders and agreements to the N-th degree. The enterprise will pay for something that will make them money or prevent them from losing it. But the enterprise isn't paying a premium and they know that.

Even within the Fortune 5 of the US if be surprised if any of them are paying more than $1B annually currently in total.

And then you can take the parent context into account. If they can just equip users with a slightly more expensive Mac and call their Dell rep to order a few thousand DGX Spark to handle the rest... Why would they risk their trade secrets and intimate details flowing into models that may or may not be trustworthy long term?

Most large enterprise have been burned by SaaS over the years in some way. I can't imagine there aren't architects in the large organizations that are truly weighing how to effectively use AI. And beyond that we're seeing more and more progress in SLMs and orchestration agents which become easier to run at scale on-prem.

> If you have any proximity to sales in the space you know that procurement and lawyers exist that have a full time job redlining purchase orders and agreements to the N-th degree.

AWS billing.

You are kind of glossing over the B2B market where contract pricing is basically just MBA vibes and the fact that people don't really care necessarily about the performance of the language model once it hits a baseline. They care about how it integrates into their lives. Precisely where first mover advantage comes into play. Having to train a language model all over again is it's own sunk cost.

b2b needs actual ROI and that's no where near. CEOs would be yelling loudly if this were returning them cash instead they're just jettison people to afford the bills.

B2B absolutely cares, especially since ZIRP is unlikely to ever come back in our lifetimes. No sane corporation is going to continue to throw billions down the drain with nothing to show for it.

Most people using ChatGPT aren't using it for coding. They are using it for writing emails, working with spreadsheets, doing research, and writing reports. They could not care less about the coding aspect of language models. ZIRP in this context is meaningless. It's just another expense for every law and accounting firm. There's an entire world beyond tech jumping into this stuff right now. Like to give you perspective on this. I called my aunt in Germany who is an almost retired MD and she was the one that brought up ChatGPT and Claude to me.

OpenAI themselves said, in their revenue projections, that they expect the consumer vs enterprise revenue split to be 50:50, though — see:

https://news.ycombinator.com/item?id=48451053

That's actually a really good sign if they are getting that many consumer subs. I was expecting it to be more like 1:4.

The trick is in the wording - they probably aren't getting that many subs. They're saying they "expect" to get that many, at some point in the mythical future.

This this this 1000 times. It’s not that the tech ain’t great, but it’s just not marketable to the levels these scammers are screaming about.

This would be greate for google, because most people, specially in the apple environment don't much care to install new tools if they have a native tool that works reasonable well. If you have an ai assistant that's minimally competent in your desktop or phone, you will not care to go after chatgpt or alternatives, and google will receive tons of data to improve their models.

Mmhmm and why spend on wrapper SaaS when open or self trained on device models do the job

Web SaaS gonna end up being seen as another failed play at slim clients and entirely centralized sources of pay to play access to eyeballs; more AOL-ification of networks

ChatGPT has >1B users globally a mere 3 years in. iPhone is at 1.5B mostly concentrated in rich areas.

Only maybe fifty million of them are paying, though.

It does not look nearly as good when you compare paying customers.

"Ed Zitron is a"

gobby ... British rabble-rouser. "Gob" is the Dick van Dyke approved word for mouth.