Apple (AAPL) May Have Found a Way to Run Large AI Models Directly on iPhones

Tech giant Apple (AAPL) is reportedly testing technology from startup PrismML that could allow much larger artificial intelligence models to run directly on an iPhone. According to CNBC, the two companies are in early discussions after PrismML compressed Alibaba’s (BABA) open-source Qwen model from roughly 54 GB to under 4 GB, which made it small enough to run all 27 billion parameters on an iPhone 15 or newer.

This could help Apple solve one of the biggest problems facing its AI strategy. In fact, powerful models usually require too much memory and processing power to operate on a smartphone. This forces complex requests to be sent to cloud data centers. However, if Apple can run AI locally, it would make AI responses faster and lower cloud costs. It would also make certain features work without an internet connection.

How PrismML Reduces Memory Requirements

Interestingly, PrismML reduces memory requirements by simplifying how information inside an AI model is stored. Instead of using 16 bits for each value, its approach uses only one or three possible values. The company claims that this allows models to use 10 to 15 times less memory. It also allows it to respond six to eight times faster and consume three to six times less energy.

However, there is a downside. PrismML CEO Babak Hassibi said that the smaller models are slightly less accurate, especially when it comes to remembering facts, though they still perform well on tasks like reasoning, coding, and math.

Nevertheless, if PrismML’s approach works at scale, Apple could fit more capable AI models into future iPhones without dramatically increasing memory requirements or depending as heavily on expensive cloud infrastructure. This is especially useful as memory-chip and cloud prices continue to rise.

Is Apple a Buy or Sell Right Now?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on AAPL stock based on 18 Buys, 10 Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average AAPL price target of $324.23 per share implies 3% upside potential. (See AAPL’s Stock Forecast).