Apple scores big victory with 'F1,' but AI is still a major problem in Cupertino

While "F1" was a victory lap for Apple' services, Wall Street's reaction to the company's AI announcements at WWDC suggest there's some trouble underneath the hood

Last month, Apple hit the red carpet as its first true blockbuster movie, "F1," debuted to over $155 million — and glowing reviews — in its first weekend

Apple's services success is an example of what the company can do when it sets goals and executes them over time

Its AI strategy could use a similar long-term plan

They couldn't have been more different

First, Apple revealed some of the artificial intelligence advancements it had been working on in the past year when it released developer versions of its operating systems to muted applause at its annual developer's conference, WWDC

Then, at the end of the month, Apple hit the red carpet as its first true blockbuster movie, "F1," debuted to over $155 million — and glowing reviews — in its first weekend

While "F1" was a victory lap for Apple, highlighting the strength of its long-term outlook, the growth of its services and its ability to tap into culture, Wall Street's reaction to the company's AI announcements at WWDC suggest there's some trouble underneath the hood. "F1" showed Apple at its best — in particular, its ability to invest in new, long-term jects

When Apple TV+ launched in 2019, it had only a handful of original shows and one movie, a film festival darling called "Hala" that didn't even its box office revenue

Despite Apple TV+ being written off as a costly side-ject, Apple stuck with its plan over the years, expanding its staff and operation in Culver City, California

That allowed the company to build up Hollywood connections, especially for TV shows, and build an entertainment track record

Now, an Apple Original can lead the box office on a summer weekend, the prime season for blockbuster films

The success of "F1" also highlights Apple's significant marketing machine and ability to get big-name talent to appear with its leadership

Apple pulled out all the stops to market the movie, including using its Wallet app to send a push notification with a discount for tickets to the film

To mote "F1," Cook appeared with movie star Brad Pitt at an Apple store in New York and posted a with actual F1 racer Lewis Hamilton, who was one of the film's ducers. (L-R) Brad Pitt, Lewis Hamilton, Tim Cook, and Damson Idris attend the World Premiere of "F1: The Movie" in Times Square on June 16, 2025 in New York City

Jamie Mccarthy | Getty Images Entertainment | Getty ImagesAlthough Apple services chief Eddy Cue said in a recent interview that Apple needs the its film to be fitable to "continue to do great things," "F1" isn't just the bottom line for the company

Films will only ever be a small fraction of the services unit, which also includes payments, iCloud subscriptions, magazine bundles, Apple Music, game bundles, warranties, fees related to digital payments and ad sales

But movies are the only services component that can get celebrities Pitt or George Clooney to appear next to an Apple logo — and the success of "F1" means that Apple could do more big popcorn films in the future. "Nothing breeds success or inspires future investment a current success," said Comscore senior media analyst Paul Dergarabedian

But if "F1" is a sign that Apple's services is in full throttle, the company's AI struggles are a "check engine" light that won't turn off

Apple Intelligence, which is a key tenet of the company's hardware ducts, had a rollout marred by delays and underwhelming features

Apple spent most of WWDC going over smaller machine learning features, but did not reveal what investors and consumers increasingly want: A sophisticated Siri that can converse fluidly and get stuff done, making a restaurant reservation

In the age of OpenAI's ChatGPT, Anthropic's Claude and Google's Gemini, the expectation of AI assistants among consumers is growing beyond "Siri, how's the weather. "The company had previewed a significantly imved Siri in the summer of 2024, but earlier this year, those features were delayed to sometime in 2026

At WWDC, Apple didn't offer any the imved Siri beyond that the company was "continuing its work to der" the features in the "coming year. " Some observers reduced their expectations for Apple's AI after the conference. "Current expectations for Apple Intelligence to kickstart a super upgrade cycle are too high, in our view," wrote Jefferies analysts this week

Siri should be an example of how Apple's ability to imve ducts and jects over the long-term makes it tough to compete with

Fourteen years later, Siri remains essentially the same one-off, rigid, question-and-answer system that struggles with open- questions and dates, even after the invention in recent years of sophisticated voice bots based on generative AI nology that can hold a conversation

Apple's strongest rivals, including Android parent Google, have done way more to integrate sophisticated AI assistants into their devices than Apple has

And Google doesn't have the same reflex against collecting data and cloud cessing as privacy-obsessed Apple

Some analysts have said they believe Apple has a few years before the company's lack of competitive AI features will start to show up in device sales, given the company's large installed base and high customer loyalty

But Apple can't get lapped before it re-enters the race, and its former design guru Jony Ive is now working on new hardware with OpenAI, ramping up the pressure in Cupertino. "The three-year blem, which is within an investment time frame, is that Android is racing ahead," Needham senior internet analyst Laura Martin said on CNBC this week

Apple's services success with jects "F1" is an example of what the company can do when it sets goals in public and then executes them over ext time-frames

Its AI strategy could use a similar long-term plan, as customers and investors wonder when Apple will fully embrace the nology that has captivated Silicon Valley

Wall Street's anxiety over Apple's AI struggles was evident this week after Bloomberg reported that Apple was considering replacing Siri's engine with Anthropic or OpenAI's nology, as opposed to its own foundation models

The move, if it were to happen, would contradict one of Apple's most important strategies in the Cook era: Apple wants to own its core nologies, the touchscreen, cessor, modem and maps software, not buy them from suppliers

Using external nology would be an admission that Apple Foundation Models aren't good enough yet for what the company wants to do with Siri. "They've fallen farther and farther behind, and they need to supercharge their generative AI efforts" Martin said. "They can't do that internally. "Apple might even pay billions for the use of Anthropic's AI software, according to the Bloomberg report

The company didn't confirm the report and declined, but Wall Street welcomed the report and Apple s rose

In the world of AI in Silicon Valley, signing bonuses for the kinds of engineers that can develop new models can range up to $100 million, according to OpenAI CEO Sam Altman. "I can't see Apple doing that," Martin said

Earlier this week, Meta CEO Mark Zuckerberg sent a memo bragging hiring 11 AI experts from companies such as OpenAI, Anthropic, and Google's DeepMind

Google spent big to hire away the founders of Character

AI, Microsoft got its AI leader by striking a deal with Inflection and Amazon hired the executive team of Adept to bulk up its AI roster

Apple, on the other hand, hasn't announced any big AI hires in recent years

While Cook rubs shoulders with Pitt, the actual race may be passing Apple by