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Good Morning from San Francisco, Apple spent two years dismissing chatbots. Now it's hiring 12,000 people to
Apple spent two years dismissing chatbots. Now it's building a ChatGPT rival through a secret 'Answers' team as the company scrambles to catch up in AI while bleeding talent to Meta and facing Siri delays until 2026.
💡 TL;DR - The 30 Seconds Version
👉 Apple forms "Answers, Knowledge and Information" team to build stripped-down ChatGPT competitor after two years dismissing chatbots.
📊 iPhone revenue jumped 13% to $44.6 billion in strongest quarter since pandemic, giving Apple runway for AI investments.
🏭 Siri's complete rebuild won't arrive until spring 2026, giving competitors 18 months to extend their AI lead.
🌍 Apple lost four AI researchers to Meta in the past month as talent war intensifies across tech industry.
🚀 CEO Tim Cook told employees AI revolution is "ours to grab" despite company's late start in the race.
💼 Company hired 12,000 workers this year with 40% joining research and development to accelerate AI capabilities.
Apple spent two years saying it didn't need a chatbot. Now it's building one.
The company quietly formed an "Answers, Knowledge and Information" team earlier this year to build a stripped-down ChatGPT competitor, according to Bloomberg's Mark Gurman. This marks a complete turnaround from Apple's previous stance, when executives dismissed chatbots as unnecessary and partnered with OpenAI instead.
The timing isn't random. Apple just posted its strongest quarter since the pandemic, with iPhone revenue jumping 13% to $44.6 billion. CEO Tim Cook used those results to rally employees around AI in a rare all-hands meeting, calling the revolution "ours to grab" despite Apple's late start.
But behind the confident talk, Apple is scrambling. The company hired 12,000 workers this year, with 40% joining research and development. It's losing AI talent to Meta at an alarming rate - four researchers left in the past month alone. And the much-hyped Siri rebuild won't arrive until spring 2026.
The new AKI team shows Apple knows its current approach isn't working. Apple Intelligence can summarize notifications and generate emoji, but it can't search the web or answer basic questions without handing users off to ChatGPT. That's a problem when AI-powered search is changing how people find information.
Apple has always avoided building a search engine, partly because Google pays roughly $20 billion annually to stay the default option on Apple devices. But that cozy deal faces trouble from two sides.
The Justice Department wants to break up Google's search monopolies, potentially costing Apple billions in annual payments. Meanwhile, AI is making traditional search engines look outdated. People increasingly turn to ChatGPT for answers rather than scrolling through blue links.
Apple's services chief Eddy Cue admitted in court that AI-based search is the future. The company has explored partnerships with startups like Perplexity to modernize its search experience. But partnerships only go so far when you're trying to control the user experience.
The AKI team, led by former Siri director Robby Walker, is building what Apple calls an "answer engine" - a system that crawls the web to respond to questions directly. The company is exploring both a standalone app and backend infrastructure to power search in Siri, Spotlight, and Safari.
Walker's involvement tells its own story. He lost control of Siri after embarrassing delays and reportedly called the situation "ugly" in internal meetings. Now he's getting a second chance to prove Apple can build conversational AI that actually works.
Apple is hiring dozens of engineers for the team, specifically seeking people with search algorithm and engine development experience. The job listings reveal the scope of Apple's ambitions: "fuel intuitive information experiences across some of Apple's most iconic products, including Siri, Spotlight, Safari, Messages, Lookup, and more."
That's not just about building a ChatGPT competitor - it's about reimagining how users find information across Apple's entire ecosystem.
Cook's all-hands meeting revealed how seriously Apple takes the AI threat. He reminded employees that Apple rarely creates new categories - it just makes better versions of existing concepts. "This is how I feel about AI," he told staff.
Cook has a point here. Apple rarely creates new product categories from scratch. Computers existed before the Mac. Palm Pilots came before the iPad. BlackBerry dominated smartphones before the iPhone arrived.
But AI doesn't follow Apple's usual timeline. The technology evolves weekly, not yearly. Apple's typical strategy of waiting and perfecting might leave them permanently behind. Competitors aren't just building features - they're reimagining how people interact with information.
Cook acknowledged the challenge by committing to aggressive spending. Capital spending jumped this quarter and will rise again next quarter as Apple builds new infrastructure. The company completed seven acquisitions this year and stays "very open" to more deals that speed up its AI roadmap.
Perhaps the most telling sign of Apple's AI struggles is Siri's total rebuild. Software chief Craig Federighi explained that Apple initially tried merging two systems - one for current commands like setting timers, another based on large language models for generative AI.
"We initially wanted to do a hybrid architecture, but we realized that approach wasn't going to get us to Apple quality," Federighi said. Now Apple is moving to entirely new architecture for all Siri capabilities.
The project got new leadership when Apple put Vision Pro creator Mike Rockwell in charge of Siri development. Federighi said Rockwell's team has "supercharged" the work, positioning Apple to "deliver a much bigger upgrade than we envisioned."
Eighteen months might as well be a decade in AI. OpenAI and Google drop new models constantly. Apple perfected phones by waiting. AI won't give them that luxury.
Apple's AI team is bleeding talent to Meta, which has become more aggressive in recruiting. Four researchers left Apple's foundation models team in the past month, joining a broader exodus of AI talent to companies offering bigger budgets and fewer constraints.
The talent drain comes at a bad time when Apple needs every expert it can find. Meta isn't the only threat - Google, OpenAI, and other AI companies are all competing for the same pool of talent.
Apple's response has been to throw money at the problem. The company dramatically increased spending on AI talent and completed several small acquisitions this year to bring in expertise. Cook said Apple isn't "stuck on a certain size" when it comes to acquisitions, hinting at potentially larger deals ahead.
Cook faced pointed questions about whether AI devices might eventually replace smartphones. His response was firm: "It's difficult to see a world where iPhone's not living in it." He sees new AI devices as "complementary" rather than replacement threats.
The numbers support Cook's confidence for now. Half of recent iPhone buyers upgraded from devices at least four years old, suggesting continued demand despite AI gadget hype. The iPhone 16 already runs Apple Intelligence features on-device, handling text editing and photo cleanup without cloud processing.
But Apple can't afford to be comfortable. The company's late start in AI means it's playing catch-up in a market that moves at breakneck speed. Building a ChatGPT competitor is just the beginning - Apple needs to prove it can compete with companies that have years of head start in conversational AI.
Even Apple's financial success creates pressure. The company's services revenue depends heavily on that $20 billion Google search deal. If regulators kill that arrangement, Apple needs its own search engine ready to fill the gap.
Apple has always controlled how you use their products. But if Siri can't match ChatGPT, people will just skip it entirely.
Apple's new team has one job: build something better than ChatGPT, or lose customers to Google. Get it wrong and Apple loses billions.
Cook's confidence may be justified - Apple has survived technology transitions before by focusing on user experience over being first to market. But AI moves faster than previous waves, and this time Apple's deliberate approach might leave it permanently behind.
Why this matters:
• Apple's betting its "arrive late but define the category" playbook works in AI, despite evidence this technology moves too fast for traditional Apple timelines
• The iPhone's dominance faces its first real threat since launch, but Apple's doubling down on making it the AI hub rather than building replacement devices
Q: Who leads Apple's new "Answers" team and what's their background?
A: Robby Walker, a senior director who previously ran Siri but lost control after engineering delays. He reportedly called the Siri situation "ugly and embarrassing" in internal meetings. Walker now reports to AI chief John Giannandrea and brought several former Siri team members with him.
Q: What does "stripped-down" ChatGPT rival actually mean?
A: Think ChatGPT but simpler. You ask a question, you get an answer. No need to visit Google's website. Apple could launch this as a separate app or just add it to Siri and Safari.
Q: How much is Apple spending on its AI push?
A: Apple won't give exact figures but says it's "significantly growing" AI investments. Capital spending jumped this quarter and will rise again next quarter. The company hired 12,000 new workers this year, with 40% joining research and development teams.
Q: Why did Apple change its mind about building a chatbot?
A: Apple Intelligence lacks search capabilities and often hands users off to ChatGPT for basic questions. With Google's $20 billion search deal facing regulatory pressure and AI reshaping how people find information, Apple needs its own solution.
Q: How bad is Apple's AI talent drain to Meta?
A: Four researchers left Apple's foundation models team for Meta in the past month alone, part of a broader exodus. Meta has become increasingly aggressive in recruiting AI talent from Apple with bigger budgets and fewer constraints.
Q: Who's now in charge of Siri since Walker moved to the Answers team?
A: Mike Rockwell, Apple's Vision Pro creator, now leads Siri development. Software chief Craig Federighi said Rockwell's team has "supercharged" the work, allowing Apple to deliver "a much bigger upgrade than we envisioned" by spring 2026.
Q: What current AI capabilities is Apple missing compared to competitors?
A: Apple Intelligence can't search the web or answer basic knowledge questions without handing users off to ChatGPT. It focuses on summarizing notifications, rewriting text, and generating emoji - not the conversational search that defines modern AI.
Q: When will Apple's AI search features actually be available to users?
A: The rebuilt Siri arrives in spring 2026. The new Answers team's work is still in early stages with no confirmed timeline. Apple is currently hiring engineers and building infrastructure, suggesting a consumer product is still far off.
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Maria Garcia
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