The French AI company, Datakaleb, that Apple acquired specializes in on-device processing. They are known for being experts in low power, runtime efficient, and deep learning algorithms that work directly on the device.

Apple's development of an on-device Large Language Model (LLM) is significant because it represents a strategic move away from cloud-based AI. This shift could lead to improvements in privacy and response times for AI on devices, potentially changing the current interaction paradigm with AI technology.

Since 2023, Apple has acquired at least 34 AI startups, which is the most among the major tech companies.

The concept of the (AI)Phone 2.0 that Apple is building refers to the next generation of iPhones that will likely incorporate advanced AI capabilities, particularly focusing on on-device processing, which could enhance user experience in terms of privacy, efficiency, and interaction with AI.