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The evidence for Apple’s apparent failure is easy to assemble. Siri remains a punchline. The promised AI-powered assistant has been delayed until 2026. Analysts have called the company’s AI strategy a “disaster” and warned it is one to two years behind competitors. Meanwhile, Apple sits on more than $130 billion in cash, watching others burn through capital at unprecedented rates.
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.
This pattern will be familiar to anyone who has watched Apple before. Portable MP3 players existed since 1998 — three years before the iPod. Samsung and Sony had smartwatches years before Apple entered in 2015. Bragi shipped true wireless earbuds in 2014, two years before AirPods. BlackBerry, Palm, and Nokia dominated smartphones before the iPhone redefined the category in 2007. In each case, Apple let others absorb the costs of pioneering, watched what worked, and entered with superior integration. The pattern suggests a company that views first-mover advantage as overrated and timing discipline as underrated.
Apple’s opportunity in AI is almost certainly not to build a better chatbot. ChatGPT, Claude, and Gemini are products designed around the model itself — you visit a website, you converse with the AI. Apple has never been interested in selling technology for its own sake. The company sells experiences that happen to be powered by technology. Its natural move is to make AI invisible: embedded across Siri, HomeKit, Apple TV, AirPods, Watch, CarPlay, Photos, and Mail. The chatbot-centric companies are building products where AI is the destination. Apple’s model would make AI the infrastructure — present everywhere, visible nowhere.
There is also a privacy dimension. Apple’s on-device processing and Private Cloud Compute architecture allow it to offer AI features without harvesting user data in the way that cloud-centric competitors must. As consumers grow more wary of AI systems trained on their personal information, this could become a meaningful differentiator — one that Google and OpenAI cannot easily replicate given their business models.
The risk, of course, is that AI does not commoditise. If network effects, proprietary data, or compounding capability advantages create durable moats at the model layer, Apple could find itself permanently dependent on suppliers who control the most strategic technology of the era. This is a genuine possibility that the company’s leadership must be weighing.
But Apple’s financial position gives it options. If the current AI capital cycle cools — and capital cycles do cool — talent becomes available, startup valuations compress, and infrastructure costs normalise. With record revenue of $416 billion, iPhone demand that Tim Cook called “simply staggering”, and annual profits approaching $100 billion, Apple is positioned to move decisively as a buyer rather than competing in a seller’s market driven by hype.
The spending gap between Apple and its competitors is real. Whether it represents a failure of vision or an exercise of it will depend on a question no one can yet answer with certainty: will AI models become interchangeable commodities, or will they remain a source of durable competitive advantage? Apple appears to be betting on the former. If it is right, today’s restraint will look like foresight. And the company will do what it has done before — enter late, integrate brilliantly, and win.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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