AI: Meta draws 'First Blood' with Apple in AI Talent Race. RTZ # 776

For those worried about Apple not having an AI strategy in this AI Tech Wave, rest assured. They had some senior AI researchers/talent that Meta wanted at the founder/CEO Mark Zuckerberg level.

This is while Meta continues its Vikings like pillaging across Silicon Valley for AI talent with Sports industry type compensation packages. It’s not just OpenAI and other Mag7s that are targets. Apple has now been nicked too.

Bloomberg provides details in “Apple Loses Top AI Models Executive to Meta’s Hiring Spree” on this seeming ‘Code Red’ moment for the company:

• “Ruoming Pang, a distinguished engineer and manager in charge of Apple’s foundation models team, is leaving for Meta Platforms Inc.

• Meta offered Pang a package worth tens of millions of dollars per year, according to people with knowledge of the matter.

• Pang’s departure could be the start of a string of exits from the AFM group, with several engineers telling colleagues they are planning to leave in the near future to Meta or elsewhere, the people said.”

The details are worth understanding:

“Apple Inc.’s top executive in charge of artificial intelligence models is leaving for Meta Platforms Inc., another setback in the iPhone maker’s struggling AI efforts.”

“Ruoming Pang, a distinguished engineer and manager in charge of the company’s Apple foundation models team, is departing, according to people with knowledge of the matter. Pang, who joined Apple from Alphabet Inc. in 2021, is the latest big hire for Meta’s new superintelligence group, said the people, who declined to be named discussing unannounced personnel moves.”

“To secure Pang, Meta offered a package worth tens of millions of dollars per year, the people said. Meta Chief Executive Officer Mark Zuckerberg has been on a hiring spree, bringing on major AI leaders including Scale AI’s Alexandr Wang, startup founder Daniel Gross and former GitHub CEO Nat Friedman with high compensation.”

This builds of course on the ‘AI Dreamteam’ Meta is assembling for Zuck’s Superintelligence goals:

“Meta has also hired Yuanzhi Li, a researcher from OpenAI, and Anton Bakhtin, who worked on Claude at Anthropic PBC, according to other people with knowledge of the matter. Last month, it hired a slew of other OpenAI researchers.

Meta, later on Monday, confirmed it is hiring Pang.”

“At Meta, Zuckerberg has made AI the company’s top priority as it races to keep pace with rivals like OpenAI and Google. Zuckerberg has been heavily involved in recruiting for the company’s AI division, hosting potential hires at his homes in Silicon Valley and Lake Tahoe, and often reaching out personally to potential recruits.”

As Meta’s Mark Zuckerberg surfs ahead, it’s notable that his pace and financial Scale of AI Talent building has been unprecedented thus far:

“Zuckerberg restructured the company’s AI teams at the end of June to better focus on “superintelligence,” or AI technology that can complete tasks as well as or even better than humans. Meta will spend tens of billions of dollars on AI-related efforts this year, the company has announced, with much of that money going toward infrastructure like data centers and chips.”

And this is a bite from Apple’s capabilities in AI to date, especially while they’ve been fundamentally questioned thus far:

“At Apple, Pang had been running a roughly 100-person team responsible for the company’s large language models, which underpin Apple Intelligence and other AI features on the company’s devices. In June, Apple announced that those models would be opened up to third-party developers for the first time, allowing for a range of new iPhone and iPad apps.”

“But internally, the foundation models team has come under scrutiny from new leadership, which is exploring the use of third-party models, including from either OpenAI or Anthropic, to power a new version of Siri. Those internal discussions have soured some of the morale on the foundation models team, also known as AFM, in recent weeks.”

And the external criticism with AI enablement of Siri have been searing thus far.

“While the company has explored a move to a third-party solution to power the AI in the new Siri, it has simultaneously been working on a new version of Siri based on the models developed by Pang’s group. Those models also power Apple Intelligence features that run on Apple devices including email and web article summaries, Genmoji and Priority Notifications.”

“The major departure, the most significant in Apple’s AI ranks since the company started working on Apple Intelligence a few years ago, underscores the heightened competition for talent in the emerging space. Meta has been making offers to the world’s top engineers worth many millions of dollars per year — significantly more than what the iPhone maker pays its engineers doing similar work.”

“Pang’s departure could be the start of a string of exits from the AFM group, with several engineers telling colleagues they are planning to leave in the near future to Meta or elsewhere, the people said. Tom Gunter, a top deputy to Pang, left Apple last month, Bloomberg reported at the time.”

Apple will now have to reassemble its AI organization some more:

“The foundation models team reports to Daphne Luong, a top deputy to AI senior vice president John Giannandrea. Earlier this year, Giannandrea was sidelined internally and saw Siri, robotics, Core ML and App Intents frameworks and other consumer product-related teams stripped from his command. That came after a poor response to Apple Intelligence and continued delays for new Siri features, including the ability to tap into user data to fulfill commands.”

Incidentally, not the Chinese American strength of Apple’s AI/ML (machine learning), a point I’ve been discussing separately, as China represents at least half of the world’s AI research talent to date. Nvidia’s Jensen Huang has been persistent in underlining this point.

“With Pang’s departure, the AFM team will now be run by Zhifeng Chen. In a change from a structure under Pang where most of the engineers reported to him directly, there will be a new organizational layout that includes multiple managers reporting to Chen, who will then have engineers reporting to them. People close to the team indicate that Chong Wang, Zirui Wang, Chung-Cheng Chiu and Guoli Yin could be possible managers in the new structure.”

The buck for now still stops at Craig Federighi, who of course reports to CEO Tim Cook.

(Giannandrea and Federighi at the Apple Worldwide Developers Conference in June 2024.Photographer: David Paul Morris/Bloomberg)

“Apple’s overall AI strategy is now run primarily by Craig Federighi, Apple’s head of software engineering, and Mike Rockwell, who helped create the Apple Vision Pro headset and now leads engineering for Siri. For his part, Giannandrea is in charge of Apple’s AI research arm. In June, at its Worldwide Developers Conference, Apple’s own AI only got a small showing, appearing in new features for translating calls and text messages.”

“The few other AI features, including analysis of on-device screenshots and improved image generation, came courtesy of partners, including OpenAI and Google. The company also rolled out a new version of Xcode that can handle code completion by tapping into Claude and ChatGPT.”

All this while the long-time Apple Senior Management ‘Band is Dissolving”, as Bloomberg highlights in a separate piece. It discusses the organizational implications of the #2 Executive at Apple, COO Jeff Williams retiring after 27 years. It sets up John Ternus, Apple’s senior VP of harware engineering, as the most likely successor eventually to CEO TIm Cook.

I wrote a few days ago every major Mag 7 has to reconsider its AI game plan in view Meta’s latest AI Talent hunt strategy. And that Apple while seeming externally relaxed, had similar urgency and priority.

While this ‘nick’ by Meta is a notable external signal about the ferocity of the AI talent war given its current supply constraints, the longer term opportunities I cite for Apple remain in place. And the company continues to evolve its organization for those opportunities.

Contrary to external perceptions, Apple has a lot of unique cards to play in this AI Tech Wave in these early days. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)