In Bed With Siri

By Espen Systad

Apple’s weakness in generative AI is a deliberate choice, not a defeat.

Finansavisen recently noted that a large share of my portfolio is invested in Apple. After a 21x return, I was asked if I am still bullish. Oh yes. The stock can triple in value over the next years.

The Visible Weakness 

Apple is widely criticized for lagging in generative AI. Rivals ship weekly upgrades to GPT-5 and Gemini, but Siri - once the promise of a Her-esque digital companion - acts awkwardly outdated and struggles with context.

Where the market sees inertia, I see patience. Most investors misunderstand the game being played. Apple is positioned to win the next phase of consumer AI, not the current one.

Apple’s Invisible Edge 

While competitors pour billions into cloud infrastructure, Apple has spent a decade building something quieter: a privacy-first, on-device intelligence stack.

Modern iPhones run language models directly on the Neural Engine. When a query is too complex, it falls back to Private Cloud Compute - servers that extend the iPhone’s hardware-security model into the data center.

This enables Apple to offer private, low-latency AI at scale, instead of treating every request as a generic cloud API call.

Local AI Changes the Economics 

Moving computation from the cloud to the device shifts three fundamentals:

• Privacy improves dramatically.

• Responses becomes near instant.

• The costs fall, and the margins increase. A local AI call is 10–20× cheaper than a cloud call.

Cloud AI scales elegantly, but at a high marginal cost.
Local AI scales almost for free at the platform level.

Anyone can build a viral chatbot. Integrating into the biological rhythms of a billion people is a far harder problem.

It is All About Context

LLMs are rapidly becoming commoditized. The next battleground is not parameter count but personal context - how well the model understands you.

Apple uniquely controls five layers of the Personal Context Stack:

• Biological - health, sleep, heart rate, oxygen levels

• Daily rhythm - work, rest, exertion

• Preferences - what you read, watch, and ignore

• Situational - location and physical environment

• Digital memory - messages, photos, calendars, files

This combination forms the richest personal dataset in consumer technology.
Trust unlocks insights, and insights are what personal AI relies on.

Apple vs. Google: two business models

Google’s Gemini success fuels the narrative that Google is Apple’s main AI rival. That is true, but the real battle is not technical. It’s economic.

Android devices can run local AI just fine. Google employs world-class privacy engineers. But Google’s core business remains the ad auction, which depends on centralized data and behavioral profiling.

For Google, privacy is friction. For Apple, privacy is the product.

I will take my Apple Watch with Siri to bed to track my sleep without worrying. I would not do that with a system where my sleepless nights eventually trigger ads for sleeping pills and low-volatility index funds.

Apple does not need to beat Google at general knowledge. It needs to win as the trusted guardian of personal knowledge.

Privacy is Becoming Political

Privacy is no longer just a technical preference, it’s becoming a political stance.

We have seen cloud accounts frozen in geopolitical disputes. We have seen the owner of X openly attack European institutions while controlling a global speech platform and training his own unfiltered AI. We have seen Meta and Google fined billions under GDPR. 

Trust in Big Tech is no longer given. Users are rightly becoming cautious.

Future personal AI will manage health, finances, relationships, and memory. The critical question is not “Which model is smartest?” It is: Who controls the data, and under which laws?

Here, Apple’s decade-long privacy stance becomes strategic insurance.
The next era of AI will not just reward intelligence. It will reward legitimacy.

What Follows

If activated, Apple’s context stack points to services far more valuable than today’s chatbots:

• Apple Health + shifting from tracking to predicting health and early disease.

• Apple Planner: a personal chief of staff optimizing energy, stress, and schedules.

• Apple Memory: an on-device “second brain” for your entire life (not unlike the Ozean der Zeit project I am developing).

Apple has the distribution, hardware, and trust layer to make such systems mainstream at global scale. None of this requires science fiction - only integration, strong UX, and deployment to 1.3 billion daily users.

Apple has not yet played its AI hand. But it holds the board.

The bull case for $AAPL 

The market still prices Apple as a mature hardware firm. If Apple establishes personal, on-device AI as a platform, the valuation drivers shift:

• Revenue growth accelerates through subscriptions

• Margins rise as software expands

• Switching costs become biological, not technical

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At that point, Apple is no longer valued as a product company. It is repriced as human infrastructure.

In my bull case, Apple compounds earnings at 12–14% while the P/E expands from ~30 to the low 50s,  a setup that implies a near-tripling of the share price. If the platform shift fully materializes, with Apple becoming the operating system for health, memory, and life logistics, valuation could exceed $11 trillion over time.

Even Apples Fall

Gravity applies to everyone. There is no guarantee Apple captures the opportunity it has. History is full of giants that stumbled. 

• The hardware upgrade cycle may slow AI adoption.

• Google’s convenience may outweigh privacy for many users.

• Siri’s brand may be too damaged to rehabilitate.

• Apple may over-index on safety and ship something uninspiring.

What Apple does this coming year is essential.

If I am wrong, reality will correct me. If I am right, Apple’s future will shift from selling phones to running the private operating system of human life.

(For full disclosure, I also hold Alphabet shares and cloud AI exposure via Nvidia.)