Apple (NASDAQ: AAPL) and Meta (NASDAQ: META) are reportedly in discussions about integrating Meta's generative AI models into Apple's newly announced iPhone AI system. This potential collaboration comes as both companies are stepping up their artificial intelligence efforts, with Apple recently unveiling its “Apple Intelligence” technology and Meta expanding its AI chatbot offerings.
While no decision has yet been finalized, the talks signal a growing trend of collaborations in the rapidly evolving field of AI. Meta's shares rose slightly on the news at market open today.
Meta shares rise on news of Apple AI partnership
Meta Platforms shares rose on Monday after reports of a possible AI collaboration with Apple. As of 9:59 a.m. EDT, Meta shares were trading at $505.30, up $10.52 or 2.13% from the previous day's closing price. The company has a market capitalization of $1.28 trillion, with trading volume of 6,655,608 shares, below the average daily volume of 13,326,916 shares.
The company's stock price has performed strongly, with Meta outperforming the S&P 500 over various time periods. Meta shares are up 42.87% year to date, while the S&P 500 is up 14.85%. The company's one-year return is 75.15% and its five-year return is 164.57%, significantly outperforming the overall market. Analysts maintain a positive outlook on Meta, with price targets ranging from $260.00 to $593.00.
Will Meta's generative AI models be adopted by the iPhone AI system?
A potential partnership between Apple and Meta could include integrating Meta's generative AI models into Apple's iPhone AI system.
While Apple doesn't pay directly for these collaborations, it does provide a valuable distribution channel for AI partners. The contract structure could allow AI companies to sell premium subscriptions through Apple Intelligence. The strategy is in line with Apple's broader efforts to incorporate AI technology from a variety of companies into its devices, potentially reducing its reliance on a single AI partner.
Apple has been making great strides in AI development, recently announcing plans to integrate “Apple Intelligence” across its suite of apps and partnering with OpenAI to enhance Siri with ChatGPT capabilities.
The company is focusing on practical AI features like sentence suggestions and custom emojis while prioritizing user privacy, and Apple plans to roll out these AI enhancements in its latest operating system later this year, though it has withheld certain features in the European Union due to regulatory concerns.
Disclaimer: The author does not own or have any positions in any of the securities mentioned in this article.
About the Author
Tim Freese is a co-founder of The Tokenist. He holds a BS in Mechanical Engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim is a Senior Associate on the US Private Equity investment team at RW Baird and is also a co-founder of Protective Technologies Capital, an investment firm focused on sensing, protection and control solutions.
