appleof (Nasdaq: AAPL) Last week's Worldwide Developers Conference (WWDC) sparked renewed interest in the company's shares, sending them to new all-time highs, but there were winners and losers among the key announcements about Apple Intelligence and the company's overall views on artificial intelligence (AI).
So who are the winners and losers of this conference? The answer might surprise you.
Winner 1: Taiwan Semiconductor Manufacturing
For me, there is a clear winner in this announcement. Taiwan Semiconductor Manufacturing (NYSE:TSM)This adds momentum to Taiwan Semiconductor's already strong business: Revenue from Apple will account for 26%, 23% and 25% of TSMC's revenue in 2021, 2022 and 2023, respectively. Its smartphone business has struggled recently but could turn around soon.
Since Apple Intelligence is only available on iPhone 15 and later models, approximately 90% of iPhone users are limited to older generation users. If Apple Intelligence becomes the latest essential technology, it could create new demand for the iPhone.
Taiwan Semiconductor will benefit as the majority of its revenue comes from this business.
Winner 2: Microsoft
Microsoft (Nasdaq: MSFT) Microsoft is also a big beneficiary of this announcement: Apple chose to partner with OpenAI (the makers of ChatGPT) because it's a company that Microsoft has a lot of investment in. This also validates the use of ChatGPT across the Microsoft Office suite, making for a pretty seamless experience for the millions of people who use Office products and iPhones every day.
The iPhone plans to run most of these workloads on the phone itself, but the complexity of the AI models may mean that some will need to be outsourced to servers, such as Microsoft Azure servers where OpenAI runs its technology — creating an additional revenue stream for Microsoft.
Loser 1: The Alphabet
alphabet (Nasdaq: GOOG) (Nasdaq: GOOGL)Google's parent company found itself on the wrong side of the fence: Alphabet's generative AI model, Gemini, is competing with ChatGPT. Apple could have chosen Gemini as the model to run Apple Intelligence, which would have been a logical continuation of the partnership between the two companies.
This breaks with the tradition of Google and Alphabet working together, with Google's search engine being the default engine on Apple products, with Alphabet footing the bill. Recently, this has been the subject of an antitrust lawsuit, which may have influenced Apple's decision to choose ChatGPT over Gemini.
Either way, Gemini is not Apple's Apple Intelligence option, so it's a missed opportunity for Alphabet.
Loser 2: Apple
The final loser, which may come as a surprise, is Apple, which may see a surge in demand for iPhones and an increase in sales, but that's not what I'm talking about here.
Apple is a massive company with resources most people could only dream of — the company has loads of software engineers and had more than $60 billion in cash and marketable securities on its balance sheet as of the end of the second quarter, which ended March 30 — but can't it build its own generative AI models in-house?
This shows how far behind Apple is in the AI race. It caught them completely off guard. Because they are partnering with an outside company, there will always be questions about data security and what information is shared with other companies. If they kept it in-house, these questions would be less important.
Instead, it could be the biggest weakness in an otherwise solid-looking product. While Apple will likely see increased sales, the long-term impact of not developing this technology in-house could be problematic for the company.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keithon Drury invests in Alphabet and Taiwan Semiconductor Manufacturing. The Motley Fool has invested in and recommends Alphabet, Apple, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
There are two winners and two losers from Apple's latest artificial intelligence (AI) announcement. This was originally published by The Motley Fool.
