Prediction: Here’s what Apple could do to catch up in the artificial intelligence (AI) revolution

It’s been almost two years since OpenAI launched ChatGPT and captured the world’s attention overnight. In the months following the arrival of ChatGPT, Microsoft has invested billions in OpenAI, while Alphabet and Amazon each invested in a rival start-up called Anthropic.

Moreover, everyone already knows this Nvidia led the artificial intelligence (AI) revolution with its GPU and data center services. Meanwhile, adze uses AI to build autonomous cars and humanoid robots.

But what do you say? Apple (AAPL -0.22%)? Aside from a small-scale acquisition and the introduction of Apple Intelligence — which has yet to fully scale — Apple has remained tight-lipped about its artificial intelligence (AI) ambitions.

Below, I’ll outline my prediction of what Apple might do to make a splash in AI, and explain how such a move could reignite the company’s growth.

What Apple could do

While Apple could follow in the footsteps of its “Magnificent Seven” cohorts and explore developing its own chips or building a custom large language model (LLM), I see both scenarios as highly unlikely.

Instead, I think Apple will make a big acquisition — and no, I’m not talking about Rivian Automotive. Rather, I think Apple will acquire a medical device company.

Image source: Getty Images.

How could this help Apple’s AI strategy?

One area of ​​the AI ​​landscape that I continue to think is being overlooked is healthcare. Artificial intelligence has many applications when it comes to health and wellness, and yet we have yet to see much focus on this pocket of artificial intelligence. Apple, for its part, has shown some interest in health management over the years.

For example, the Apple Watch has many health-focused tools, including heart rate monitoring, motion or irregular rhythm detection for atrial fibrillation, mobility tracking, and even medication management.

In addition, the Apple Watch also contains sensors that can monitor sleep patterns. Meanwhile, Apple’s AirPods Pro 2 have hearing aid functionality and can monitor noise levels in your environment.

As we previously wrote, Precedence Research estimates that the total addressable market for healthcare AI will reach $614 billion by the beginning of the next decade. Precedence notes that Internet of Things (IoT) devices, such as smart wearables, and the software and services built into these tools are some of the catalysts fueling AI in healthcare.

Making an acquisition in healthcare could put Apple in a leadership position in an otherwise underserved area of ​​the AI ​​landscape. And given that Apple already has a roster of health-focused hardware, software, and services, I think acquiring a medical device company to expand its portfolio is a natural fit.

Moreover, should Apple make such a move, consumers using any of Apple’s new healthcare devices will be even more entrenched in the company’s ecosystem of installed devices.

Why Apple might not make an acquisition

I see some obvious reasons why my prediction may never come true.

First, Apple isn’t known for big acquisitions. The company is known for its internal innovations and has rarely made billion-dollar acquisitions to help spark new growth or augment existing product lines.

Second, Apple’s latest device has been largely unsuccessful. Of course, I’m talking about his virtual reality headset, the Vision Pro. If Apple were to acquire a medical device company with the intention of bolstering the Apple Watch or AirPods and ultimately fail to do so, investors will begin to wonder if the company’s best days are over. industry-leading hardware and software are behind it.

Finally, Apple’s new iPhone literally hit the market a few weeks ago. The launch serves as Apple’s long-awaited foray into the AI ​​market. If initial views of Apple Intelligence are uninspiring, the company will probably be better off improving existing services rather than going out and buying another asset that will require heavy integration and product development efforts.

The bottom line

At the end of the day, I think Apple’s deeper moves into AI-based healthcare could be a game-changer. But that said, such an idea is pure speculation on my part. A lot would have to go for Apple to pull off such a move, and it’s entirely possible that the company could double down on its already established AI protocols and build on them to gain market share in the industry.