SED News: Apple’s AI Problem, The Real Business Model of AI, and Token Cost Reckoning

Apple is at a crossroads, not just technologically but culturally: despite its massive market value and hardware dominance, the company has yet to deliver a meaningful AI breakthrough, with its Siri demo famously being fake and its AI leadership in flux. This raises a critical question: can a company built on hardware excellence and supply chain mastery truly pivot into an AI-native future? The answer may lie in a deeper structural issue—Apple’s financial optimization playbook, which has slashed R&D spending to just 2% of revenue, may be actively stifling the kind of risky innovation that fuels AI disruption. Meanwhile, the real business model of AI is emerging not from consumer subscriptions, but from enterprise spending: companies like Anthropic and OpenAI are finding product-market fit not through individual users, but by enabling entire workforces to become dependent on AI tools. This creates a paradox—AI is supposed to reduce work, but instead, it’s fueling a new kind of burnout, with employees working longer hours, not fewer, as teams race to keep up with AI-driven expectations. The result? A looming token cost reckoning, where companies face bills in the tens of thousands per month, forcing a shift toward cost optimization and raising urgent questions about sustainability.