After a decade of ongoing investment, Apple (AAPL) is reportedly ending its effort to build the Apple Car, nicknamed Project Titan.
The surprise move to shutter the project was announced by Chief Operating Officer Jeff Williams and Kevin Lynch, a vice president in charge of the project, on Feb. 27, according to Bloomberg.
The executives reportedly told the nearly 2,000 employees who were working on Project Titan that though there will be layoffs, many people will be transitioned to Apple's artificial intelligence division as the project winds down.
Apple did not immediately respond to a request for comment.
Related: Apple reportedly abandons one of its most ambitious projects
Apple began work on the car in 2014, with plans of delivering an electric, self-driving vehicle. The multi-billion-dollar project, however, struggled from the beginning, highlighted by several strategy and leadership changes.
The decision to kill the project was finalized by senior executives in recent weeks, according to Bloomberg.
The move, according to Deepwater's Gene Munster, is a "positive" for electric vehicle giant Tesla (TSLA) .
Munster 'shocked' on the death of Project Titan
Munster, responding to the report, said that he's "shocked" by Apple's decision to end its decade-long endeavor to produce a self-driving vehicle.
Despite skepticism that the Apple Car would ever see the light of day, he said that "the ending of the project ends optionality around a project that would have shifted Apple's top line growth from around 5% to 15% plus."
If Apple had been able to perfect, manufacture and sell the Apple Car, and if the company was then able to capture 10% of the auto market, they would have seen at least $250 billion annually in revenue, increasing their overall business by 60%, according to Munster.
It's not all bad, though; Munster said that the move signals Apple's sharpening focus on the generative AI space, something Apple has been working on behind closed doors for months.
"While for Apple automotive is a bigger long-term revenue opportunity than generative AI, the decision to move on from Titan does have a benefit because it will increase the company's urgency to do something profound in generative AI," he said. "This is a positive for Tesla. I've long believed Apple was Tesla's biggest long-term US competitor."
Related: Apple could win the generative AI race — here's why it won't
Munster: Apple 'has the ability to have the best model'
Munster told TheStreet in January that, considering the importance of unique, proprietary data in the construction of highly-capable generative AI models, Apple "has the ability to have the best model."
He added however that Apple's access to such data doesn't mean that the company will use it. Apple's strong position regarding the protection of their users' data privacy, according to Munster, will force the company to purchase third-party user data.
Because of this, Munster said that Apple "be in the game," but its model won't be the best.
He expects the company to start previewing its generative AI efforts, which he said will likely pertain to personalized AI and generative AI-enhanced Siri, in June.
But having the best model, according to Munster, is not necessary for Apple to be highly competitive in the AI space.
"The average consumer doesn't care that this is copying out to GPT-3.5 when GPT-4's out. They care if can they hit a button and get what they want," Munster said, saying that Apple's AI venture will likely be like the iPhone, which has "never been the best phone. It's always been the phone that works best. I think that's exactly what they're going to do."
Kyle Morse, the deputy executive director at the Tech Oversight Project, said in response to the report that the "subtext here is loud."
"Yes, Apple is giving up its problematic Apple Car dream amid the threat of sweeping antitrust enforcement, but it’s just trading one potential monopoly for another — now it’s AI. Their AI projects will violate users’ privacy and block competition."
Information about Apple's ventures in the generative AI space has yet to be unveiled by the company; it remains unknown what data their models will be trained on, how that data will be acquired and how user data might be utilized.
Contact Ian with AI stories via email, ian.krietzberg@thearenagroup.net, or Signal 732-804-1223.
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