Apple CEO Tim Cook responds to DeepSeek AI arrival

Zac Hall | Jan 30 2025 - 3:04 pm PT

DeepSeek privacy under investigation in US and Europe | App seen on an iPhone

When asked about Chinese AI firm DeepSeek on today’s investor call, Apple CEO Tim Cook explained how the disruptive new model is a positive development for the iPhone maker.

Analyst Ben Reitzes from Melius raised the question of how the arrival of DeepSeek is viewed by Apple. DeepSeek represents a drop in developmental cost of spinning up advanced AI models as well as the cost to run these models.

Hey, Tim. I wanted to ask you, you knew this one was coming, but there’s a perception that you’re a big beneficiary of lower cost compute, and I was wondering of your worldly perspective here on the deep situation, and if you are going to, if anything’s happened to change your views in terms of the tailwind to margin and your ability to execute, even due to the potential for cost to come down due to that development and probably what’s going to happen that happened anyway, but I love your perspective on that.

Cook responded by acknowledging the innovation that DeepSeek has shown in bringing down the cost of training and running their V3 model, which is behind the R1 reasoning model that competes with ChatGPT o3:

In general, I think innovation that drives efficiency is a good thing, and, you know, that’s what you see in that model.

Our tight integration of silicon and software I think will continue to serve us very well. As you know, we do things on the device and we do things in the private cloud, which mimics from an architectural point of view, what happens on the device.

And from a CapEx point of view, we’ve always taken a very prudent, deliberate approach to our expenditure and we continue to leverage a hybrid model, which I think continues to serve us well.

That hybrid model, building out Apple Intelligence while integrating with OpenAI’s ChatGPT, has certainly been praised this week. Apple is seen as not overly investing in AI now that development and operational costs should come down. Of course, that doesn’t mean Apple can slow its AI efforts, but it certainly takes the pressure off for now. For much more on the DeepSeek development, read our 9to5Neural explainer on DeepSeek, how it’s disrupting the American AI landscape, and more.