Apple is quietly beefing up its artificial intelligence capabilities, according to a report from Financial Times, with the aim of bringing advanced AI features to the next generation of iPhones.

The tech giant has made a series of acquisitions, new hires, and hardware updates that point to AI becoming a major focus. Industry data and academic papers show Apple zeroing in on the challenge of running AI models directly on mobile devices, rather than relying solely on cloud computing.

Apple has snapped up 21 AI startups since early 2017, per PitchBook research, including its recent purchase of WaveOne, a video compression specialist using AI. 'They are getting ready for big AI mergers and acquisitions,' said Daniel Ives of Wedbush Securities. 'Apple can't afford to be left behind in the AI arms race.'

Though notoriously secretive about product plans, Apple seems to be developing its own large language model for generative AI applications, industry sources say. At last year's earnings call, CEO Tim Cook said Apple is investing 'responsibly' in AI research across the board.

The end goal appears to be running advanced generative AI directly on iPhones, without relying solely on cloud data centers. That's a tall order, requiring both trimmed-down AI models and faster mobile chips.

Apple is playing catch-up here; Samsung and Google have already showcased generative AI features powered by their latest smartphones. But all eyes are now on Apple's Worldwide Developers Conference, typically held in June.

Analysts expect iOS 18 to focus on enabling on-device generative AI. That could include Siri using a large language model, bringing Apple into alignment with rival voice assistants.

New Apple chips like the M3 Max suggest preparations for intensive AI workloads. The company touted the MacBook processor's ability to handle billions of AI parameters. The iPhone 15's A17 Bionic has a blazing-fast neural engine designed for tasks like image recognition.

Apple appears to have laid the groundwork for advanced generative AI. While competitors have moved faster, the launch of iOS 18 could be the moment Apple catches up on the software side - and puts AI directly in the hands of millions of iPhone users.