Apple’s canned car put it in the unusual position of far behind the pack

I’m sure most of the people who were working on the project won’t feel the same way, but the reaction from outside Apple has been largely positive.

Constellation Research founder Ray Wang told the BBC it was a “smart and long-awaited decision” as “the market demand for EVs is not there, and AI is where all the action is.” From the Apple investor side, Synovus Trust senior portfolio manager Dan Morgan professed a “sigh of relief” in comments to the Wall Street Journal, arguing: “When you looked at Apple’s future initiatives, the car project was always the most far-fetched for Apple. This just isn’t in their wheelhouse.”

Swissquote Bank senior analyst Ipek Ozkardeskaya compared the move to Meta’s decision to pivot from the metaverse to AI. “Having understood that missing the AI turn would be a severe hit to the company, they are getting—a bit later than the others—into the AI race. Better late than never.”

Tim Cook may disagree about the “late” part—he’s consistently pointed out that Apple has embraced AI in a behind-the-scenes sort of way. But no matter how plausible his protestations have been, investors haven’t been listening. In an age of AI FOMO mania, the markets demand a spotlight on any company’s embrace of the technology and are currently (and hopefully only temporarily) unenthused about EVs. It also didn’t help Apple’s EV push that electric car prices are being driven down to cutthroat levels. Chinese carmaker BYD, for example, is selling an EV in its home country that starts at just over $11,000. So here we are.

The modest share-price bump that followed the news of the car cancellation may reflect the fact that Apple found itself in the unusual position of being perceived as late to the party, no matter what it chose to do.

Bloomberg Apple-whisperer Mark Gurman reported last month that the release of the company’s car had been pushed back to 2028 at the earliest and, worse, it would no longer be a fully autonomous vehicle. If Apple is going to enter a new market segment, it needs to do so with market-leading technology and ideas, like it’s done with the Vision Pro. Had it plowed on, it seems likely that Apple’s car wouldn’t have been a first on any significant front—it wouldn’t even have been the first car from a phone maker, seeing as Xiaomi just showed off its own EV at Mobile World Congress this week.

So now Apple is left giving the impression that it’s scrambling to keep up with its peers in generative AI. It’s not the company’s usual look, but at least Apple can really make something of gen AI in its proven, existing product lines. There’s little use eyeing an entry into a cutthroat new sector when staying ahead in your actual wheelhouse requires a ton of focus.

I’ll give the last word to Deepwater Asset Management’s Gene Munster, who wishes Apple was moving forward with both gen AI and its EV: “An Apple Car would have been epic.” More news below.

David Meyer

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NEWSWORTHY

Chile pauses Google data center. Google has to rework its plans for a new data center in Chile, to take account of climate change. As Reuters reports, Santiago residents have been up in arms over the project’s water consumption, given an ongoing water crisis there. There is a growing swell of concern around the world over data centers’ water and power consumption, especially as AI workloads increase rapidly. Separately, Tesla is in trouble over its Gigafactory just outside Berlin, which is apparently polluting the German capital’s drinking water.

Texas sues Pornhub. In the first suit under new state laws that aim to protect kids online, Texas Attorney General Ken Paxton has sued Pornhub’s parent company for failing to comply. As The Verge reports, the suit alleges that Aylo’s various adult websites did not implement “reasonable age verification methods.” Aylo, until recently known as Mindgeek, hasn’t commented on the suit yet, but Texas is far from the only place it’s facing regulatory pressure.

AI training deals. 404 Media reports that Tumblr and WordPress parent Automattic is in talks to offer up its users’ posts as AI-training fodder for OpenAI and Midjourney. According to the publication, an internal Tumblr email revealed how too much user data “was queried for the initial data dump to Midjourney/OpenAI,” though it’s unclear whether the excessive data actually went to those companies.

ON OUR FEED

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—Google CEO Sundar Pichai sends a memo to staff about the Gemini AI’s “completely unacceptable” racial diversification of historically white people such as Vikings and the Pope, in its now-paused image generation function. Pichai promised “a clear set of actions” to address the problem, including “structural changes” and more robust testing of Google’s AI.

IN CASE YOU MISSED IT

Bumble joins the tech layoff trend, cutting a third of its staff after CEO shakeup as it struggles to entice new paying users to its dating apps, by Bloomberg

Texas Bitcoin miner sues feds over energy survey: ‘We don’t want politics infecting data,’ by Niamh Rowe

The market sage who warned about the dotcom bubble says another ‘may be forming’ right now over AI, by Will Daniel

What Google’s ‘woke’ AI image controversy says about AI—and about Google, by Jeremy Kahn

Sony slashes 900 jobs from its PlayStation gaming unit, by Chris Morris

Nvidia billionaire cofounder created a $70 million supercomputer at University of Florida. Then Ron DeSantis banned top AI experts from China, by Bloomberg

BEFORE YOU GO

Dealing with space junk. There’s nearly 1,000 dead rockets floating in the skies above us, and now the first mission to remove one has begun. It’s a project of the Japanese space agency JAXA and, as MIT Technology Review reports, it involves a spacecraft that will visit a rocket and inspect it, so people can figure out how best to bring the thing back to earth safely. Space lawyer (now there’s an awesome job) Michelle Hanlon of the University of Mississippi: “It cannot be overstated how important this is … We have these ‘debris bombs’ just sitting up there waiting to be hit.”