They don't necessarily need to keep up. Apple's been working on building the APIs and underlying system that will allow AI models to be selected much like you select a default search engine in your browser. They've also been more focussed on developing small, special purpose models for on device processing of images, text, etc. and the silicon to accelerate them.

OpenAI, Anthropic, and others can spend billions on the infrastructure to train the models at a time when the technology is still immature and largely inefficient and then Apple can simply license the models as needed, giving the user the choice while potentially protecting their privacy. Once there's relative maturity in the industry, they can either continue to license the models, distill their own from them, or even train their own using others' infrastructure. To me, it's a smarter long term strategy even if it temporarily gives up their control of key technology.

Personally, it seems to be the smarter play and aligned with how Apple usually does things. They're usually not first to market but they're first to introduce a refined product that make people forget about everything that came before it.

Does it matter whether or not they have a better model? Is frontier-level intelligence needed for the kind of day-to-day tasks people use their phones for? I’m not convinced this will be a big differentiator in this area.