Apple’s WWDC Clouded by Worries Over AI, Tariffs, and Legal Battles
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As companies create AI-powered solutions, how can they ensure they're effective and trustworthy? Join IBM at the break to hear how companies can build trust in their AI with Hrithika Gunnar, IBM's General Manager for Data and AI. Welcome to Tech News Briefing. It's Monday, June 9th. I'm Victoria Craig for The Wall Street Journal. A growing list of problems have soured investor sentiment on Apple. Can the company's annual developers conference help shake off some of that gloom?

Then, Americans used to care about the cost and reliability of electricity. Now, they're fighting over how it's produced. Our reporter takes us to the South to find out why.

But first, a week of technology and creativity. That's what Apple promises at this year's Worldwide Developers Conference, dubbed WWDC. It kicks off today with a keynote and reveal of the tech giant's latest software and technologies, and continues all week with a host of events.

WSJ Heard on the Street columnist Dan Gallagher reports that investors have been glum ahead of the conference. The stock is down roughly 20 percent since the start of the year, the worst run ahead of WWDC since at least 2010. So Dan, what's the best run?

What's got investors down? Well, you have to pick your reasons for it at this point, because going into this, Apple has a lot of problems going on. They're facing this challenge of tariffs and this trade war between the U.S. and China. And China is still where most of their products are made.

They're also facing the risk that there's been these legal cases that are threatening fees from their app store, the commission they get, plus the payments they get from Google. Those are all very important contributors to their profitability. Now, specifically to this conference, Apple is seen as now trailing behind where it should be in AI.

on top of these other problems has really made investors concerned. And how did Apple drop so far behind its peers in the realm of artificial intelligence? Since that seems to be the technology du jour, it's a little bit weird talking about Apple being behind in this realm. With AI, there was some thinking that they would take their time, do it right. And there were businesses different than when you look at like Microsoft, Google, and Amazon that run these giant cloud computing businesses with huge networks. Apple's

Apple has a very different business model. It's still very hardware focused. They had to figure out a way to bring AI to their devices to get them in front of customers. So a lot of companies have struggled with this on-device AI concept, but everybody thought, okay, if a company can do it, Apple can. That hasn't proved to be the case yet. If we think about the developer conference then, maybe some low hopes around AI, but what can we expect to see Apple unveiling this week?

I think we'll hear talk about AI. They're kind of in a weird spot because if they don't talk about AI at all, they'll be seen as even further behind. But they also don't want to end up in the trap they ended up last year where they gave a big preview of stuff they're going to do and then had to backtrack that as the year progressed.

We saw in the last few weeks, OpenAI has snagged the design guru who made magic of Apple devices for years, Johnny Ive. You say at the end of your column that the famously secretive Apple could very well spring some of its own surprises. What could some of those things look like? I realize that's a lot of speculation, but is there still room to be surprised from the developers conference, do you think? Well, there's always room to be surprised, but one thing to keep in mind is Apple is...

primarily a hardware company. That's where they get most of their revenues in business, and that's actually the vehicle through which they sell most of their services. WWDC has typically not been a hardware-focused event. They usually unveil their new iPhones later in the year, but whatever OpenAI is doing, it's probably not going to be trying to make their own smartphone. They've pretty clearly communicated that they want to do some new kind of thing that really makes AI accessible for everybody.

And so could Apple be working on something like that? It's certainly plausible. This is where you don't really count Apple out because when it comes to devices and design, they do have a lot of very strong operating history in that. But we really don't know what they're planning. And for that matter, we don't really know what OpenAI is planning. But now that they have Johnny Ive, who is this major force within Apple, it's a new type of risk that Apple's facing.

That was Dan Gallagher, WSJ's Heard on the Street columnist. Coming up, what do inbreeding concerns of a 300-strong bear population in Georgia have to do with solar energy? We'll have that answer after the break.

Enterprise AI is an unstructured data problem at scale. How does generative AI address it? Rithika Gunnar, General Manager for Data and AI at IBM, explains. Think of this as emails, PDF, PowerPoint decks that sit in an organization. Generative AI has allowed us to unlock the

opportunity to be able to take the 90% of data that is buried in unstructured formats, which really unlocks a new level of driving data and insights of that data into your workflows, into your applications, which is essential for organizations as we go forward.

As the demand for artificial intelligence rises, so too does the need for electricity to power it. And solar energy has been expected to contribute much of that extra oomph. But sentiment on solar is souring due to a number of factors, as WSJ commodities reporter Ryan December has been looking into. Ryan, your reporting focuses on America's south, where our country's solar boom is really rooted. Increasingly, though, people are growing skeptical. What's

What's going on? You're getting situations where people are saying, look, we like green energy, but maybe that's not the greenest use of this land. I traveled to a place called the Okie Woods Wildlife Management Area. It's on the Okmulgee River south of Macon, Georgia, and it's a wildlife preserve. But now the landowners want to sell it.

and solar developers want to build because there's a transmission line running right through the property. The problem is the locals said if you hem in the wildlife, in particular the local black bear population, you're going to hurt them more. They're already so restricted in their movement by highways and development in this fast-growing area that they're starting to inbreed. And scientists from the University of Georgia are saying they're turning up with all sorts of alarming birth defects everywhere.

No ears, no tails, not just like no ear flap, no ear canal, odd numbers of testicles in some of the males. And that really swayed the public opinion locally to say, we don't want to rezone this timberland for power production, even though this solar developer has a solar farm down the road that makes the county a lot of money. This isn't the place for it. So what has all this controversy meant for this company called SolarCity?

Silicon Ranch that has really been trying to expand its solar farm footprint. Silicon Ranch has gone looking for, you know, other sites. They have plans to double their footprint. They're one of the country's biggest solar developers. And executives expressed regret to me that they didn't engage more with the community to show them how they could improve

build their solar arrays to work better with wildlife, how they could take the land and not only do energy production, but an agricultural business. Like, for example, their other solar farm in that same county in Georgia, they are raising sheep for the meat and obviously to keep the grass down and from blocking the solar panels from the sun. Yeah.

Adding to the mounting pressures for the solar industry is President Trump, who has not been hesitant about expressing his opposition to renewable energy development in favor of breathing even more life into America's oil and gas production. So what does this mean long term for the solar industry and how it moves forward?

President Trump and his people in D.C. have been pretty open about their intention to dismantle a lot of the things that the Biden administration did to foster renewable energy production in favor of fossil fuels. And so we're seeing tax breaks rolled back. We're seeing challenges to projects on public lands, federal lands. And that sentiment is trickling down into people. Energy has become politicized. You know, Americans used to care about

Is my electricity cheap and affordable? And is it reliable? Do the lights come on when I flip the switch? And now, increasingly, Americans care about how it is produced. When we think about technology, we think about the biggest trend, artificial intelligence.

artificial intelligence, the huge demand for electricity that that drives. So what does the future of solar look like? And can it continue to contribute to the nation's energy supply in a meaningful way? Well, it's going to have to. Solar is the fastest and cheapest to bring online. There's arguments about the efficiencies and things like that. But you can put up a solar array and start producing electricity a lot faster than you can build a nuclear plant or a gas plant. So

We're really counting on it. It's been the fastest growing source of power generation in America the past few years. And everyone from Wall Street to Washington, D.C. thinks that that will probably continue. And it frankly needs to continue if we're to fire up all these data centers and

plug in all our electric cars and do all these things to electrify. Whether we're displacing fossil fuels or not, we're going to need the extra energy. So this is really a conundrum where the solar developers, they have this area where it's ideal to generate solar electricity, and they have the situation where they have a lot of landowners who are interested in making greater income with solar than they would growing loblolly pine for a sawmill,

But then you have other locals who are stepping in and saying, for various reasons, whether it's wildlife, political ideology, or local tax issues and tax breaks that are needed to build some of these things and make the projects economical. So you're getting a lot of pushback, and they're going to have to navigate that to build what they are needing to build to keep us on pace for our electrical demand.

That was Ryan December, a commodities reporter for WSJ. And that's it for Tech News Briefing. Today's show was produced by Julie Chang and Anthony Bansi with supervising producer Melanie Roy. I'm Victoria Craig for The Wall Street Journal. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.

How can companies build AI they can trust? Here again is Hrithika Gunnar, General Manager for Data and AI at IBM. A lot of organizations have thousands of flowers of generative AI projects blooming. Understanding what is being used and how is the first step. Then it is about really understanding what kind of policy enforcement do you want to have on the right guardrails on privacy enforcement.

The third piece is continually modifying and updating so that you have robust guardrails for safety and security. So as organizations have not only a process, but the technology to be able to handle AI governance, we end up seeing a flywheel effect of

more AI that is actually built and infused into applications, which then yields a better, more engaging, innovative set of capabilities within these companies. Visit IBM.com to learn how to define your AI data strategy. Custom content from WSJ is a unit of the Wall Street Journal Advertising Department. The Wall Street Journal News Organization was not involved in the creation of this content.