This is the most likely explanation. Apple manufacturers some of the best inference silicon on earth. Apache licensed models are already 1000x smarter than siri and strongly outperform anthropic, openai and google in the 8-128GiB of RAM range. The article says Apple can run this stuff on customers’ hardware, so that’s the range of model sizes that actually matter.

Not if the privacy situation is what Apple says in the Keynote. Only if they can tap that data.