Apple's 'Answers' AI: The Strategy to Replace OpenAI

Recent reports confirm Apple has established a new internal team, codenamed ‘Answers,’ to build its own generative AI answer engine. This development signals a strategic acceleration in Apple’s long-term plan to move beyond its recently announced partnership with OpenAI. The move follows the unveiling of ‘Apple Intelligence,’ a hybrid system that currently relies on OpenAI’s GPT-4o for complex, world-knowledge queries. The formation of the ‘Answers’ team makes it clear that the OpenAI integration is a strategic stopgap, not a final destination. Apple’s objective is to develop a proprietary AI engine that fully leverages its unique on-device processing and Private Cloud Compute infrastructure, aiming to create a deeply integrated, context-aware assistant that solidifies the latest Apple AI strategy update and challenges the dominance of existing search paradigms.

Key Points

• Apple’s new ‘Answers’ team is developing a proprietary AI engine, demonstrating Apple’s clear strategy to eventually replace its OpenAI partnership.

• The current ‘Apple Intelligence’ system operates on a hybrid model: a 3-billion-parameter on-device model handles most tasks while OpenAI’s GPT-4o processes complex queries.

• Internal development builds on Project ‘Ajax,’ Apple’s framework for large language models, with some trained on over 200 billion parameters.

• Apple’s research, including the ‘ReALM’ paper, demonstrates superior on-screen context understanding capabilities, establishing a key differentiator between its on-device AI and cloud-based alternatives.

Silicon Sanctuary: Apple’s Privacy-First Architecture

At its 2024 Worldwide Developers Conference, Apple detailed ‘Apple Intelligence,’ a system built on a dual-pronged approach to balance privacy with performance. The foundation is a 3-billion-parameter model running directly on the iPhone’s A17 Pro or Mac’s M-series chips. In its official announcement, Apple stressed that processing personal data locally ensures that sensitive information like emails and messages never leaves the user’s device.

For more demanding requests, the system escalates to ‘Private Cloud Compute,’ using servers powered by Apple silicon. This architecture is engineered to process user data in a secure, stateless environment that Apple itself cannot access. While this hybrid model is a significant technical advancement, Apple acknowledged its own models are not yet a match for broad-world knowledge. The strategic integration of OpenAI’s GPT-4o—where users are prompted for permission before data is sent—fills this capability gap immediately. This pragmatic approach provides users with state-of-the-art features while buying Apple time to advance its own Apple proprietary AI engine.

Ajax to Algorithms: The Core Engine Evolution

Apple’s ambition to build its own engine is not new; it’s the result of years of substantial investment and focused research. The company’s R& D spending hit $22.61 billion in fiscal 2023, a $3.12 billion year-over-year increase largely directed at AI. At the core of this effort is Project ‘Ajax,’ Apple’s internal framework for creating large language models, some of which were reportedly trained on over 200 billion parameters.

To signal its technical capabilities and attract talent, Apple has become more public with its research. For instance, its described a system for understanding on-screen context that outperformed GPT-4 in specific reference resolution tasks. This research highlights Apple’s focus on leveraging personal context—what is on your screen, in your calendar, or in your messages—an area where a cloud-based model from Google or OpenAI has no access. Releases of efficient, open-source models like further demonstrate a technical strategy prioritizing multimodal understanding that runs on consumer hardware, forming the foundation for what the ‘Answers’ team will build upon.

Beyond Blue Links: Redefining Search

Apple’s strategy extends beyond creating a better Siri; it represents a fundamental challenge to the traditional search market dominated by Google. The industry is already shifting toward “answer engines,” moving away from lists of blue links. This trend is fueling intense competition within a generative AI market that, according to Fortune Business Insights, was valued at USD 67.43 billion in 2023 and is projected to grow at a 36.1% CAGR through 2030.

With control over the hardware and software on more than a billion devices, Apple is in a unique position to direct user behavior. As analyst Ben Thompson of Stratechery notes, Apple’s goal is not to out-search Google on the open web but to make traditional web search less relevant by providing answers directly within the OS. By indicating it will integrate other models like Google’s Gemini in the future, Apple positions itself as an intelligent broker, but the ultimate goal remains clear: to have its own ‘Answers’ engine as the default, making any partner secondary or, eventually, obsolete.

Walled Garden to AI Ecosystem

Apple’s formation of the ‘Answers’ team is a definitive statement of intent. The company is executing a patient, multi-year strategy built on its core tenets of vertical integration and user privacy. While the current reliance on OpenAI is a practical necessity, it is clearly a temporary phase. The technical foundation laid by Project ‘Ajax’ and the contextual advantages shown in its research provide a clear roadmap. The challenge is immense, with a slow, deliberate rollout on high-end devices limiting initial reach, a hardware requirement explained by Ars Technica. Still, the strategic direction is set. With a dedicated team now in place, how long will it be before Apple’s AI stands entirely on its own?