Good morning. Has Apple lost its creative verve? It’s certainly not the first time someone’s asked the question. Most of the time, the answer is “no.”
But as the analyst Benedict Evans recently put it, Apple’s AI slip-ups—in which it failed to establish a category-leading smart assistant, launched underwhelming “intelligence” features on its phones, and promised better features without anything real to show off—may reveal “a Vista-like drift into systemically poor execution.” Ouch.
My take? Apple long ago miscalculated how big and how fast this AI stuff would get, and made more missteps in an attempt to catch up. I do think the creativity’s still there, but fair warning, Cupertino crew: It’ll never come out if it’s in service of the outside world’s expectations.
Today’s news below. —Andrew Nusca
P.S. Mr. Evans will also be speaking at Fortune Brainstorm AI London in May. (Told you it would rip.)
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Apple makes changes to Siri leadership
Hey, speaking of Siri!
Apple is shaking up its leadership in the face of widespread scrutiny—and underwhelming device sales—for its underwhelming artificial intelligence offerings.
A new Bloomberg report notes that CEO Tim Cook “has lost confidence in the ability of AI head John Giannandrea to execute on product development,” leading him to appoint Mike Rockwell, the leader behind its Vision Pro headset, to take over all things Siri.
Rockwell will depart the Vision products team and report to software chief Craig Federighi. Apple announced the news internally on Thursday.
Apple’s AI woes are not just a matter of optics. Its iPhone 16 release was largely oriented around a suite of “Apple Intelligence” features in part led by Siri, but they were not available on the device’s launch date. Device sales atypically slipped for the quarter.
When some Apple Intelligence features finally did launch later that fall, reviewers considered them incremental improvements and not the momentous change promised by Apple’s relentless marketing. Worse, a smarter Siri still paled in comparison to competing services like Google Assistant.
Apple has turned around a lackluster launch before—its 2012 Maps misfire ended in leadership changes and the awkwardness of temporarily recommending that customers use competing services. We’ll see what happens here. —AN
The clock ‘struck midnight’ for Tesla’s CEO, analyst says
One of Tesla’ biggest champions has doubled down on his wake-up call to Elon Musk, calling on the CEO to return to the helm of the limping EV-maker.
Dan Ives, managing director at Wedbush Securities and a longtime Tesla mega-bull, said in a Wednesday note that the limited brand damage Tesla has experienced to date has now escalated into “a brand tornado crisis moment for Musk and Tesla.”
“The clock struck midnight,” Ives told Fortune. “Investor frustrations boiled over, and the more Tesla becomes a political symbol, the worse it is to the brand and the stock.”
The so-called vortex picked up speed earlier this month, when Tesla recorded its worst single-day sell off, losing $127 billion in market value.
Beyond facing stiff competition from China, where EV-makers boast more affordable cars, faster charging, and more impressive automated driving, Tesla has also been battered by criticism of Musk’s heavy involvement in President Donald Trump’s administration.
A recent event featuring Tesla cars on the White House lawn didn’t help.
“It does not resolve the current brand/demand problem for Musk and Tesla,” Ives said in his note to investors, “and in some ways makes it more of a political lightning rod issue for Tesla.”
After Musk spoke of his plans to work with Trump for another year while admitting he’s running his various companies “with great difficulty,” Ives called on the CEO to return to the helm of Tesla, lest a setback become a free fall.
“Tesla is going through a crisis and there is one person who can fix it,” Ives said. “Musk.” —Sasha Rogelberg
Mistral AI CEO denies IPO plans
Mistral AI CEO Arthur Mensch denied reports the Paris-based startup is planning a public offering in a Fortune interview at Nvidia’s GTC conference.
The rumors began following an interview with Bloomberg in Davos in January, in which Mensch emphasized that Mistral was “not for sale” and that an IPO was “the plan."
“I was asked a question about our future, and what I said is that we intend to remain an independent company, [so] the natural path is to get to an IPO at some point,” he told Fortune. “Just to clarify, we’re not looking towards an IPO [right now].”
Mistral burst on to the AI scene less than two years ago. Its co-founders were veterans of Google DeepMind and Meta’s AI research lab. Its first AI model, Mixtral 8x7B, was widely praised.
But industry observers have questioned whether the AI foundation model company has what it takes to go the distance against deeper-pocketed competitors such as OpenAI and Anthropic, not to mention tech behemoths such as Meta, Google DeepMind, and Microsoft.
Mistral has raised $1 billion to date, but that amount is dwarfed by the $18 billion OpenAI has raised so far (with SoftBank poised to invest another $40 billion) and the $8 billion in Anthropic’s coffers.
That’s important because Mistral must contend with the cash burn—in terms of powerful computing equipment and top talent—necessary to stay at the cutting edge of AI. It must also keep pace in a category where any performance edge becomes rapidly commoditized. —Sharon Goldman
More data
—Apple TV+ loses $1 billion each year, even with some 45 million subscriptions. (Though the real moneymaker is the device it’s playing on.)
—CoreWeave IPO could raise $2.7 billion at a valuation of up to $32 billion.
—Google adds “smarter” Gmail search. It’s currently rolling out globally for personal—not business—users.
—Perplexity reportedly in talks about raising $1 billion. A fresh fundraising outing could double its valuation to $18 billion.
—SEC: Proof-of-work crypto mining is OK. It doesn't trigger U.S. securities laws and operators need not register transactions with the SEC.
—Tencent slows GPU rollout thanks to DeepSeek AI efficiencies.
—ECB: We need a digital euro to compete with stablecoins and reduce U.S. reliance.
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