(Bloomberg) -- Apple Inc., racing to add more artificial intelligence capabilities, is nearing the completion of a critical new software tool for app developers that would step up competition with Microsoft Corp.

The company has been working on the tool for the last year as part of the next major version of Xcode, Apple’s flagship programming software. It has now expanded testing of the features internally and has ramped up development ahead of a plan to release it to third-party software makers as early as this year, according to people with knowledge of the matter.

The new system will operate similarly to Microsoft’s GitHub Copilot and use artificial intelligence to predict and complete blocks of code, said the people, who asked not to be identified because the plans are private. That simplifies the programming process for software development, potentially saving time and money.

Apple is also exploring the use of AI to generate code for testing applications, an often tedious process. Currently, Apple is pushing some engineers to try these new AI features internally as part of a “dogfooding” effort — when a company uses its own products — to make sure they work properly before releasing them to outside developers.

The moves are part of a broader push into generative AI and large language models, the technology behind popular chatbots like ChatGPT. Apple is playing catch-up with tech peers in this burgeoning market, but has promised to discuss its plans for AI later this year. That announcement could come as soon as June, when the company holds its annual developers conference.

Apple shares, which had been down as much 1.5%, briefly turned positive on the news. They were little changed at the close Thursday, trading at $183.86. Microsoft fell less than 1% to $406.56.

An Apple spokesperson declined to comment on the plans.

It’s been an urgent undertaking. Craig Federighi, Apple’s senior vice president of software engineering, has told his teams to develop as many new AI features as possible for this year’s operating system updates. 

He’s also tasked his lieutenants with drumming up features that use the technology and has made top deputy Sebastien Marineau-Mes a point person for the effort. Apple executives demonstrated the AI functions to the board late last year, with Marineau-Mes conducting much of the presentation, the people said. The Xcode work is being overseen by another Federighi lieutenant, longtime software engineering vice president Andreas Wendker.

Read More: Inside Apple’s Big Plan to Bring Generative AI to All Its Devices

Apple’s next iPhone and iPad software updates — iOS and iPadOS 18 — will include a slew of new AI features, according to the people. The company is planning to tout the software, codenamed Crystal, as one of the most significant updates in the 16-year history of the iPhone.


It’s also planning to bring some AI features to the next version of macOS, codenamed Glow. Still, Apple aims to take a gradual approach to AI development, with some enhancements not coming for years. 

The company has explored other new AI features, including ones that would automate the creation of Apple Music playlists and make slideshows in its PowerPoint rival Keynote. Another feature under consideration is a revamped version of Spotlight, Apple’s systemwide search feature.

The new version would be able to toggle between specific features within apps and answer complex questions based on data trained from large language models. LLMs, the technology that powers AI tools, is developed by bombarding software with a torrent of data.

Early designs of the Spotlight overhaul include using LLMs to answer more complex questions and the ability to tap deeper into apps to launch specific functions. The current version of Spotlight is mostly limited to launching apps, making basic web searches and pulling up information like the weather and sports scores. 

Read More: Apple Tests ‘Apple GPT,’ Develops Generative AI Tools to Catch OpenAI 

Tim Cook, Apple’s chief executive officer, said during his latest quarterly conference call that engineers “continue to spend a tremendous amount of time and effort” on the initiative.

The competition is mounting. In January, Samsung Electronics Co. launched a new Galaxy S24 smartphone line that weaves in Google AI features — offering a preview of sorts to what Apple is expected to do with the iPhone 16 later this year. 

The company has also continued to hone its own LLMs to enhance Siri and services like AppleCare support. The company is looking to improve Siri’s ability to answer complex questions accurately, and the customer service teams are trying to speed up chat and phone support. Apple is also heavily invested in integrating AI into its health features.

(Updates with share trading in sixth paragraph.)

©2024 Bloomberg L.P.