Apple Inc (NASDAQ:AAPL, ETR:APC) shares lifted 1% by close of US trading on Tuesday when it was reported the Tech Giant had cancelled a decade-long development project for an Apple-branded electric car.
The company reportedly will devote the freed-up resources to its artificial intelligence division, a sector that is exploding at a time when demand for EVs is faltering.
Ten years of development appear to have gotten the company exactly nowhere.
“Affordability is an increasing problem and since Apple isn’t going to want to sell an entry-level EV, that leaves them with an increasingly tight premium market,” Guidehouse Insights principal analyst Sam Abuelsamid told The Verge.
“If Lucid and Rivian can’t find a way to sell expensive EVs with products as good as they have, it’s going to be tough for another newcomer like Apple.”
Refocusing on generative AI
As Bloomberg’s Mark Gurman reported on Wednesday, Apple surprised the nearly 2,000 people working on the project with notice of its closure on Tuesday.
Two executives told staff the project staff will be redeployed to its artificial intelligence division to focus on generative AI projects, a hot topic at the moment and an increasingly lucrative opportunity for Apple.
The company sees “incredible breakthrough potential for generative AI, which is why we’re currently investing significantly in this area,” Cook said at Apple’s annual shareholder meeting, which was held virtually.
“We believe it will unlock transformative opportunities for our users when it comes to productivity, problem-solving and more.”
Apple has yet to reveal its AI ambitions with any real clarity, but the tech giant often makes similar major announcements at its annual developer’s conference in June.
“Later this year, I look forward to sharing with you the ways we will break new ground in generative AI, another technology we believe can redefine the future,” Cook said.