The initiative, known as LLM Siri, is being led by Mike Rockwell and Craig Federighi, following a reassignment of oversight from former AI chief John Giannandrea due to performance concerns.

Despite perceptions of falling behind in AI, Apple executives maintain that their strategy prioritizes user privacy and data security in the integration of AI tools.

Concerns regarding reliance on external AI technologies have affected morale within Apple's AI team, as employees feel blamed for the slow progress in generative AI.

Apple has been testing customized versions of AI models like Claude and ChatGPT on its Private Cloud Compute servers, indicating a willingness to integrate external solutions.

The ongoing negotiations with AI firms highlight Apple's struggle to retain talent, as competitors offer significantly higher compensation packages.

Tim Cook has emphasized the need for rapid innovation in AI to maintain Apple's market position, especially as new product categories emerge.

Apple is exploring the use of AI technology from Anthropic and OpenAI to enhance Siri, moving away from its previous reliance on in-house models.

Discussions are currently underway with both companies to develop tailored versions of their large language models for testing on Apple's cloud infrastructure.

This shift in strategy comes amid increasing competition in the AI sector, where other tech companies are rapidly advancing their virtual assistant capabilities.

Apple's stock has seen a decline of nearly 20% year-to-date, prompting investors to seek a solid AI strategy from the company.

Following news of Apple's discussions with OpenAI and Anthropic, the company's shares rose by over 2%, reflecting investor optimism.

The updated version of Siri, which was announced at last year's Worldwide Developers Conference, has faced significant delays and issues, resulting in a lack of contextual understanding.