AI Makes Apple World's Most Valuable Company Again

0:00Today on the AI Daily Brief, a new survey that shows that educators are very enthusiastic about AI for education. Before that in the headlines, Apple is once again the world's most valuable company. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI. To join the conversation, follow the Discord link in the show notes.

0:24Welcome back to the AI Daily Brief Headlines Edition, all the AI daily news you need in around five minutes. We've been tracking the Apple AI strategy announcement all week. On Monday, I gave you my first takes just after the presentation. on Tuesday, we talked about the conversation around privacy and whether Apple could thread the needle between wanting to give you AI-powered experiences that relied on all your personal context while also keeping all of your personal data safe. We've also been tracking how much the market was responding to things. And initially, there were some big questions.

0:56In fact, Apple's performance on the day of WWDC on Monday was its worst WWDC keynote day performance in at least 11 years. However, then yesterday, it seems like the market digested the news and Apple rocketed up to new all-time highs, becoming once again the most valuable company in the world, overtaking Microsoft for that position. On Tuesday, Apple was up about 4%, reaching$215 a share for a market cap of$3.29 trillion. That followed a 7 % bump the day before. Said Michael James from Wedbush, all those questions about Apple lagging from an AI technology standpoint were answered at the Worldwide Developers Conference.

1:34Some of the specifics about AI capabilities that are going to be integrated into the upcoming iPhones made it very apparent that there will clearly be demand for a significant upgrade cycle. One of the things that analysts have been looking for is a reason for people to want to upgrade their iPhones. At this stage, a huge portion of Apple's revenue still comes from the iPhone specifically, and each year there's a question of whether the new features justify an expensive upgrade. Analysts are betting that these new AI capabilities, which will only be available for the latest editions of the phone, could be enough to get people to switch up.

2:05Compared to other companies in and around the AI race, Apple's 2024 performance overall has been a bit lagging. They're up 12 % now on the year, but they were basically flat until this presentation. Compare that to Microsoft, which is up 16%, Alphabet, which is up 28%, and NVIDIA, which is up 154%. So what was it between Monday and Tuesday that got people to get back on the train with Apple? Sergei Alexashenko argued that it was Ben Thompson's strategy article about WWDC. He said, I am personally convinced that it was Ben Thompson's opinion that moved Apple over 5 % up. His newsletter came out within 15 minutes of the bottom tick.

2:42It was a glowing endorsement. Before that, the market wasn't sure how to parse the news. Would be the most impactful newsletter issue ever, a$150 billion market cap move in Apple. On the flip side, Neil Seibart said, I would use extreme caution interpreting what's going on with Wall Street as it pertains to Apple. Attributing any single day move to a particular news catalyst is a futile exercise. Yesterday, Apple's shares closed up 7.2%. That is one of the strongest moves higher in recent years. For a$3 trillion market cap company, it's noteworthy. One would assume the move higher was related to WWDC.

3:11Every Wall Street bank published their WWDC reaction article the night prior. However, there are a few things that give me pause about that thinking. Apple shares did not gap significantly higher between Monday's close and Tuesday's open. In fact, there was no gap at all. This suggests there was not a sudden event or realization that prior night or morning that led to a dramatic shift in demand and supply of issues. Shares opened somewhat calmly at 193 on Tuesday. So what happened? Basically, Neil points to more structural possibilities. For example, he said, yesterday demand and supply of Apple was not necessarily driven by participants buying or selling because of WWDC or Apple intelligence.

3:43Instead, computers took over as Apple began to flash positive trading signals. To have shares of the largest company, mind you, move a few percentage points higher in an hour triggers bells on trading desks. Have it move 5 % higher, more bells. 7%, even more bells. The fact that these moves weren't overnight gaps factored into the programs. To then have all-time price highs be involved and technical resistance levels be broken, yep, more bells. He also pointed out that the buy side has been underweight Apple all year, and that, quote, given Apple's weight in the S &P 500, if it's underweight in a fund's portfolio and then moves significantly higher in price, that potentially equals a bad day for those funds.

4:16As a result, they would need to buy Apple shares to increase their exposure. All really valuable caveats and some super interesting analysis. Speaking of super interesting analysis, investor Sam Lesson argues that the OpenAI Apple deal is really, really bad for OpenAI. He writes, OpenAI isn't going to win this, no chance. Apple, with the users' distribution and critically built-in app content and developer ecosystem, will. Apple just put ChatGPT in a tiny, tiny box and turned it into best-case commodifying content middleware. This is no Google-style relationship. He said the deal is just terrible for OpenAI and really spells the end for ChatGPT.

4:51They just got Appled. How? Well, it is one thing to be Google and have a super-strong economy so you can pay Apple for search and distribution. But OpenAI can't possibly afford that because they don't have a business model that works. So what happens? Apple puts them in a teeny tiny box as an optional upsell sometimes, which they can change at will and offer alongside anything else they want. You know what that does? That makes ChatGPT nothing more than a dumb content provider. This is a much broader question, something that we'll probably explore here. But for now, I will just leave that hanging out in the air for you to digest.

5:21Speaking of OpenAI, the company has hired a new CFO, Sarah Fryer, and a new chief product officer, Kevin Wheel. Sarah Fryer, who was recently the CEO of Nextdoor, is joining as the company's first chief financial officer. and Kevin Wheel previously headed up product at Twitter and Instagram. By and large, these are seen as ringers, and OpenAI really gearing up to compete in an even more intense environment. Speaking of an even more intense competition environment, France-based Mistral has finally secured that round that we've been hearing about for months, pulling in$600 million at a$6 billion valuation.

5:51This is right around one year since the company was launched, and has tripled the valuation of the last funding round back in December. The round was led by General Catalyst, and also included existing investors including Lightspeed, Andreessen Horowitz, NVIDIA Salesforce, Samsung, and IBM. And if you want to get clear on who they're going after, Arthur Mensch, the CEO, told the Financial Times, We were told when we started that this is a market that is never going to be disrupted. We showed that this wasn't the case, and we effectively disrupted the OpenAI business model. One of the things that makes people so interested in Mistral is how they seem to be doing more with less.

6:22From the FT, Mensch said that Mistral has used a little more than 1 ,000 of the high-powered GPU chips needed to train AI systems and spent, quote, just a couple of dozen millions of euros to build products that can rival those built using much bigger budgets by some of the richest companies in the world. Said Mench, we seem to be doing very different calculations of the cost needed to build large AI models. Still, they say this fundraising is about being competitive in a capital-intensive market. Mench said the more computing capacity we have, the more we can get into our team to break the barriers of artificial intelligence.

6:50So lots of interesting things going on, but that is going to do it for today's AI Daily Brief. Next up, the main AI breakdown. Today's episode is brought to you by Super Intelligent. Regular listeners know that Super is our platform for helping people learn how to actually use AI tools. These are not long, laborious courses. These are fun, fast tutorials that get you actually using the world's most interesting and useful AI tools within minutes. If you want to build a web application with no code, we've got tutorials for that. If you want your presentations to look better than ever and take you less time than ever, we've got tutorials for that.

7:26If you want help brainstorming, writing social media copy, and just generally working smarter, faster, and better, we've got tutorials for that. We've worked really hard to make it so that there is no better place on the internet to learn how to actually put AI to work for you, and I'd love for you to check it out. Go to BeSuper.ai, and use code PODCAST for 50 % off your first month. Once again, that's BeSuper.ai. Welcome back to the AI Daily Brief. Professor Ethan Mollick recently tweeted, I find all of the giant debates here over whether AI is useful or not completely disconnected from the surveys, showing that AI is one of the most rapidly adopted technologies in history, and people who use it keep using.

8:07I was skeptical about the first surveys, but now there are many. If you are a regular here at the AI Daily Brief, you will have heard me beating this drum quite a bit. That I think that the vast majority of the AI is overhyped type of coverage is driven by the need for a new story and a new narrative in media versus any reality. The other explanation that I've often given is a misunderstanding of how AI adoption is already happening. Specifically the fact that it is not entire categories of jobs being wiped off the earth all at once, but instead people who are finding really simple but significant ways to save themselves 10 minutes, 15 minutes, 30 minutes at a time here and there, but over and over again.

8:46Certainly, if you watched Apple's presentation earlier this week, you got the sense that they believe that the way AI will come to the masses is through those simple day-to-day uses. But by way of example, Ethan points to a couple of surveys. One is that recent LinkedIn-Microsoft survey that found that 75 % of knowledge workers are already using AI at work. And as an aside, 78 % of them are smuggling that AI in and not telling their bosses for fear of being told they're not allowed to use it anymore. But the new study and the focus of what we are looking at today is that, to the surprise of probably no one, as CNBC puts it, AI is getting very popular among students and teachers very quickly.

9:22The study in question came from the Walton Family Foundation. The foundation writes, in 2023, the Walton Family Foundation commissioned the first national survey of teacher and student attitudes towards ChachiBT. The findings showed that educators and students embrace innovation and are optimistic that AI can meaningfully support traditional instruction. A new survey, conducted May 7th to 15th, 2024, showed that knowledge of and support for AI in education is growing among parents, students, and teachers. More than 80 % of each group says it has a positive impact on education. So a couple things to note about this.

9:55This is not some random survey. It's a very well-known and respected foundation working with impact research. And the interviews are really recent. These are about as up-to-date as you're going to get from a survey. We'll talk about the Walton Family Foundation's findings at the end, but let's look at the numbers first. One standout is that the percentage of people who have heard of ChatGPT has grown significantly. Last year, 25 % of teachers and 34 % of students had never heard of it, whereas now that number is almost negligible. Overall, three-quarters say that they are either somewhat or very familiar with the technology.

10:26And what's more, it's more than just familiarity. Across teachers, K-12 students, undergrads, and parents, almost 50 % are using ChatGPT at least weekly, both inside and outside of school. Interestingly, it's the parents that are using it most, suggesting there is overlap between parental usage at work and student usage in school. There has been a 26-point increase in the number of K-12 students using ChatGPT weekly since last year. From a demographics perspective, the numbers are pretty concentrated, although the foundation notes that male, Black, younger, and urban teachers use AI most personally and at work.

11:0186 % of Black teachers used AI chatbots for work, compared to 71 % of White teachers and 69 % of Hispanic teachers. That said, Hispanic students are some of the top users of AI, with 85 % using AI chatbots personally and 77 % having used AI chatbots for school. When it comes to how confident they are in their use of AI, by and large, everyone is fairly confident, but the least confident groups are older parents and teachers. The study found that a majority of people have favorable attitudes towards AI chatbots, but that while K-12 students are much more supportive than they were last year, teachers are actually a little bit less supportive than they were.

11:38A far greater percentage of teachers, students, and parents say that AI chatbots have had a positive impact on their users versus a negative impact, with those who have actually used AI having a dramatically higher opinion of it than those who haven't, and everyone expects to be using AI more over the next five years. When it comes to overall attitudes, despite the fact that they are using these technologies, there's definitely some anxiety about their potential impact on the workplace. When asked whether they were more concerned with America pushing too far too fast on AI, killing jobs and putting people out of work, or America falling behind on AI, not maintaining in competitive edge with other nations.

12:13Basically, every group was more concerned about killing jobs than competitive edge, with undergraduates probably surveying a job landscape the most concerned about that. I will note that the construction of this question I think could be a little misleading. They asked, which of the following are you more concerned about, not how concerned you were? One of the ways to take that question is, which do you think is more likely? In other words, one might be concerned about both equally in a general sense, but think that it's more likely that America goes too far too fast than it is that it falls behind.

12:44Point being that this is just a little reminder to never take survey results at too much of face value. Maybe the biggest banner headline that stands out is this one. When asked whether the use of AI in education has had a positive impact or a negative impact, the differential is wild. Teachers say it's positive versus negative by 81 to 14. K-12 students have it positive at 89 to 4. undergraduates put the positive impact at 94 compared to just 4 with a negative impact, and even parents, who are right now struggling to deal with the implications of other technologies like social media, have AI having a positive impact on education at 84 versus just 11 for a negative impact.

13:22Teachers, K-12 students, and parents all think that AI chatbots will have legitimate educational use cases, whereas interestingly, undergraduates are more likely to think that they will be used by students to cheat. Unsurprisingly, all of these groups think that students need to stay on top of AI. Each of these groups thinks that AI chatbots should be allowed for schoolwork, with less than a fifth in each category suggesting it should be restricted or banned. And the older students get, the more likely teachers are to think that they should be encouraging chatbot use. This one I think is pretty common sense.

13:52You still want kids to have the fundamentals, and you don't necessarily want to replace that with AI, but the deeper you get on having the fundamentals, the more you can build on it with what AI can offer. Student use of ChatGPT without teacher permission is on the rise. And that's probably because most K-12 schools do not have an AI policy. So once again, we're in a smuggling situation. When it comes to how teachers have used AI in the classroom, helping with creative ideas, lesson planning, creating worksheets or examples, creating quizzes, all are some of the top uses. One that's a little nerve-wracking is detecting students' attempts to cheat or plagiarize, which of course we know that AI is not actually able to do.

14:27When it comes to the specific impact of AI, it appears to be all about efficiency and productivity. And the more that people use it, the more convinced they are that it's good. When it comes to training, a majority of teachers haven't received training, but they would like to. Overall, 25 % of teachers have received training, 17 % haven't and would not like to, but 56 % haven't but would like to. But these sort of numbers can get really long, especially if you've been listening rather than watching this episode. And so I'll end there, and I'll just say this. The rampant optimism on display among all of these groups, not just the students themselves, but from teachers and parents, is so at odds with what some of these media narratives would suggest.

15:07It doesn't surprise me at all that the more the people actually use these tools, the more positive their opinion gets. And I hope that this type of usage becomes a leading indicator for AI adoption more broadly. Really interesting stuff. Great job to the Walton Family Foundation for commissioning this study. For now, though, that is going to do it for today's AI Daily Brief. Until next time, peace.