Here is where Apple’s bet becomes genius. AI models are commoditizing faster than anyone predicted. Software and hardware both have tendencies to commodify. Protections exist but they have to do with integration and distribution. DeepSeek built a model for $6 million that matches systems costing $100 million. Open source models now power 80% of startups seeking VC funding. The moat these companies are spending hundreds of billions to build is evaporating.
Apple understood this before anyone else. It didn’t build its own AI model, it licensed Google’s Gemini for about $1 billion a year. Why spend $100 billion building a factory when outsourcing costs a billion? And if a better model appears next year, Apple just switches vendors…Apple didn’t miss the AI revolution. It just bet that the winners won’t be the ones who build the infrastructure. They’ll be the ones who own the customer and no one else on Earth owns the best customers.
