Top analyst sends Apple CEO blunt message about its future | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Apple’s reputation for creating groundbreaking consumer electronics and software under former founder and CEO Steve Jobs is being tested this year.

CEO Tim Cook is under intense scrutiny to make a splash in artificial intelligence, a massive market opportunity already being captured by deep-pocketed rivals, including OpenAI’s ChatGPT, Google’s Gemini, and Microsoft’s Copilot.

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So far, Apple’s foray into AI with Apple Intelligence has been criticized for being too little, too late. Apple watchers are increasingly urging Cook to take action and boldly move in the space, reminiscent of Jobs’ iconic “one more thing” reveals at Apple conferences.

Veteran Wall Street analyst Dan Ives is the latest to weigh in on Apple’s AI problem.

The long-time Apple analyst delivered a blunt message on what Apple should do next to address its AI ambitions.

Apple CEO Tim Cook is under pressure to accelerate Apple’s artificial intelligence roadmap.

Image source&colon; Morris/Bloomberg via Getty Images

Apple’s future depends on thinking big on AI

The flurry of AI chatbot activity is already upending how consumers and businesses consume information.

Rather than digging through endless search results to find answers or information, people are increasingly turning to large language models like ChatGPT, Gemini, and Copilot to get deeper and robust answers more quickly.

They’re also using it to create in ways unthinkable two years ago. People use it to research deeply, produce and consume entertainment, and help organize projects. Businesses are building custom AI agents to boost worker efficiency, improve sales, and eliminate customer service bottlenecks.

AI’s applications are seemingly endless, leading many to believe AI chatbots and agents will be the most disruptive technological advance since the Internet.

As a result, huge amounts of money are at stake.

The IDC FutureScape report predicts global spending on technology to support AI will reach $337 billion in 2025 and grow to at least $749 billion by 2028 as companies shift from building AI infrastructure and training generative and agentic AI to inference or using AI apps in the real world.

Capturing its fair share of that growing pie is going to require Apple making some bold moves, according to Ives, who has been tracking technology companies for decades and is currently Managing Director and Senior Equity Research Analyst at Wedbush Securities.

Following Apple’s $100 billion additional commitment to US manufacturing, Ives offered a blunt three-prong approach Apple should use to accelerate its AI roadmap.

“In our view: Three Moves Cook & Cupertino Need to Make To Avoid a “Blackberry Moment” in AI. Address the elephant in the room…🎯🏆👇🍎,” wrote Ives on X, formerly Twitter.

His three ideas include:

“1. Do the Perplexity acquisition before it’s too late.

2. Bring in outside talent to the management team

3. Do the Google Gemini partnership.”

Apple has reportedly considered using its $36 billion cash war chest to acquire Perplexity, an existing AI player.

Adding more top-notch AI talent could also help it leapfrog rivals, as other big tech companies are already doing.

Finally, partnering with Google Gemini for a more robust AI experience on iPhones, tablets, and Macs could help it close the AI gap for users.

Apple’s next AI moves are critical (and likely costly)

Apple doesn’t have a shortage of financial firepower to follow Ives’ roadmap. It boasts some of the most loyal consumers on the planet, and racked up an eye-popping $94 billion in sales in the June quarter, resulting in $23 billion in net income.

Still, following advice won’t come cheap.

If Cook wants to accelerate Apple’s AI development, acquiring Perplexity could do the trick.

Perplexity markets an AI chatbot similar to Google Gemini and OpenAI’s ChatGPT. Its in-house model, Sonar, is built on Meta Platforms’ Llama open source code. Perplexity has also leveraged DeepSeek’s R1, and Perplexity Pro subscribers can choose between other large language models, including OpenAI, Gemini, Anthropic’s Claude, and Elon Musk’s Grok.

Perplexity’s user-first approach of matching the right Chatbot and real-time insight to users’ needs nicely matches Apple’s historical mission. It would provide an out-of-the-box solution for Apple to monetize AI.

Perplexity, launched in 2022, has over 22 million monthly active users. According to About Chromebooks data, its annualized revenue could reach $150 million this summer, up from $63 million last year.

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Perplexity isn’t publicly traded and, with an AI search market share of about 6%, is reportedly valued at $18 billion.

Apple would likely have to pay much more than that, but Cook may be willing to consider it.

“We’ve acquired around seven companies this year,” said Cook on Apple’s recent earnings conference call. “We’re very open to M&A that accelerates our road map… We are not stuck on a certain size company.’

Poaching away AI talent would be costly, too, given recent deals.

An AI talent war has broken out this year. For instance, Anthropic, backed by Amazon, is aggressively hiring and working to retain workers. OpenAI’s Sam Altman has accused Meta of trying to poach its workers by offering $100 million bonuses.

This summer, Meta Platforms invested $14.8 billion in Scale AI to acquire a 49% nonvoting stake and lock up Scale AI CEO Alexandr Wang to lead its new superintelligence project.

Inking a deal with Gemini looks like it could happen soon. The Verge reported earlier this year that during Google’s search monopoly trial, Alphabet CEO Sundar Pichai confirmed a meeting with Cook and suggested a deal to get Gemini on Apple devices could come this year.

It remains to be seen what Apple’s AI plans ultimately are, but one thing seems clear: It needs to act soon if it wants to avoid falling too far behind.