Apple enters the AI race after acquiring Canadian startup DarwinAI

Well, well, well: look what the cat dragged in! It’s Apple, now joining the AI party!

Bloomberg’s always-ahead-of-the-rest Mark Gurman says that Apple has recently acquired the Canadian artificial intelligence startup DarwinAI. Such a move was overdue, given that everybody else (meaning the rest of the huge, intergalactic corporations) are making their AI moves and Apple is so far falling behind.

This acquisition is part of Apple's ambitious AI expansion planned for this year, with generative AI features coming to iOS 18 later in 2024. Apple CEO Tim Cook has hinted at groundbreaking AI developments, with major announcements anticipated at the worldwide developers conference in June.

Per the report, the acquisition was completed “earlier this year” and led to many DarwinAI employees joining Apple's AI division, a move kept confidential until now.

DarwinAI is about technologies that enhance the visual inspection of manufacturing components across various industries, while also working towards compressing AI systems to operate more efficiently and swiftly. This expertise is particularly relevant to Apple's emphasis on device-based AI processing as opposed to relying solely on cloud computing.

Among the notable team members transitioning to Apple is Alexander Wong, a distinguished AI researcher from the University of Waterloo, who co-founded DarwinAI and has taken up a directorial role in Apple's AI team.

Following the acquisition news, Apple's stock saw a temporary increase of more than 1%, indicating positive market reception.

Speaking of stocks, Apple’s shares last week hit rock-bottom for 2024, trading as low as $169. In January 2024, it was around the $195 mark.

Other giant corporations have been riding the recent AI wave with greater success: the artificial-intelligence hype train fuelled rally is paying off. Microsoft stock is up 8.5% this year, which pales in comparison with Nvidia’s stock that has soared 78% in 2024 alone, with its market cap valuation approaching Apple in size.

In contrast, Apple is seen to be somewhat behind the times on AI, having not announced any major generative AI features so far. However, rumors indicate that is set to change at WWDC this June, with iOS 18 featuring deep AI integration across the system.

2023 was a blessing from above for Nvidia. With brutal gains of 240%, it was the best-performing S&P 500 stock in 2023. Arm Holdings' shares (another chip-making company that has been AI-oriented lately) also saw an incredible jump of 80% in recent weeks – that’s what high demand for AI chips does.

It was recently that Nvidia eclipsed Alphabet (think Google) as the third most valuable US company. Ahead of Nvidia are only Microsoft (currently numero uno) and the silver medalist Apple.