Tech
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Rani Molla

Apple’s AI phone utterly failed to drive sales

Apple’s iPhone revenue declined nearly 1% to $69.1 billion in its all-important holiday quarter, compared to the same period one year prior. Analysts had expected a 1.4% increase. It’s disappointing not only because the December quarter is Apple’s biggest, but also because it represents the first full quarter of sales for Apple’s new iPhone 16.

Shares are down about 2% in after-hours trading.

Apparently Apple’s AI phone wasn’t enough to drive a much-needed upgrade cycle. With the iPhone 16, the consumer electronics giant reimagined its signature product with artificial intelligence at its base.

“AI will reinvent and provide a new era and a new chapter for iPhone and iPad and the Mac and all of our products over time,” CEO Tim Cook said in an interview with Wired in December. “Because I think it changes the way you interface with the product.”

But Apple Intelligence is not very intelligent so far (some experiments have shown that Siri has gotten even less helpful with its advent) and perhaps consequently hasn’t caused people to buy the iPhone, which represents about half of Apple’s revenue. Apple also hasn’t spent as much as other tech companies on AI capex and outsourced a lot of that to leaders in the space, like OpenAI’s ChatGPT.

On the bright side, not really being considered an AI company after all has proved to be an asset amid this week’s AI tech rout, and Apple is again the world’s most valuable company. This hasn’t, however, protected the stock from a flurry of recent downgrades.

“Today Apple is reporting our best quarter ever, with revenue of $124.3 billion, up 4% from a year ago,” Cook told investors today, numbers which were roughly in line with analyst expectations. That good news, however, was thanks to its Services division and not the iPhone.

Revenue in China, a very important market for Apple, was lower than Wall Street expected, down 11% to $18.5 billion.

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While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5

Statement on the US government directive to suspend access to Fable 5 and Mythos 5

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

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