Why Apple Bet on an Engineer to Lead the AI Era

Summary

WSJ What’s News (April 21, 2026)

Episode: Why Apple Bet on an Engineer to Lead the AI Era

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Overview

This episode of WSJ What’s News covers the high-profile succession at Apple, with hardware chief John Ternus set to lead the company into the AI era following Tim Cook’s departure as CEO. The episode also unpacks pivotal business and policy stories: Spirit Airlines’ plea for federal aid amid industry turmoil, President Trump’s surprise support for psychedelic drug research, and Germany’s industrial pivot from auto manufacturing to defense production.

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Key Discussion Points & Insights

1. Apple’s Leadership Transition and the AI Challenge

(00:19–03:14)

• John Ternus Named Next CEO:
  Apple’s first CEO change in 15 years will see John Ternus, head of hardware, replace Tim Cook in September.

  • Ternus has led major hardware initiatives, including AirPods, iPhone, and Apple’s move from Intel to in-house chips.
  • The transition comes amid criticism that Apple’s innovation has stalled compared to rivals investing heavily in AI.

• Cook’s Advice to Ternus:
  Tim Cook’s guiding principle for Ternus emphasizes values:

  “Be yourself, keep a firm North Star on the values of the company. Because if, if you get the values right...you may be blown off course a little bit, but eventually you will come back to the right path.”
  —Tim Cook [01:36]

• Apple’s Position in AI:
  Deputy tech bureau chief Bradley Olsen highlights Apple’s strengths and challenges:

  "Apple is basically the delivery system for AI ...for billions of people that have iPhones... But it's behind its rivals in terms of building models that people will use."
  —Bradley Olsen [02:30]

  • Ternus inherits the task of making Apple a major AI player, especially as a public-facing executive.
  • Tim Cook will stay on as executive chairman, potentially mentoring Ternus.

• AI Revenue & Strategic Moves:

  • Apple’s App Store AI revenue set to surpass $1 billion in 2026, fueled by subscription fees from partners like OpenAI.
  • Analysts expect a more AI-powered Siri Assistant and broader integration into software ecosystem.

2. AI Investment Race: Amazon and Anthropic

(03:14–03:27)

• Amazon boosts its investment in Anthropic (Claude AI model), now totaling $25 billion, including $100 billion in cloud services—demonstrating escalating stakes in AI infrastructure.

3. Aviation Industry Under Pressure: Spirit Airlines’ Struggle

(03:27–05:23)

• Rising Fuel Costs:
  High fuel prices drive up operating expenses; Alaska Air cuts financial guidance, shares drop.
• Spirit Airlines and Possible Government Aid:
  Aviation reporter Ben Katz shares updates:

  “One of those options would actually be the US government taking a stake in the embattled airline.”
  —Ben Katz [04:33]

  • Spirit is at risk of liquidation and seeking relief, but other low-cost carriers are lobbying for help as well.

4. Psychedelic Drugs: From Fringe to Federal Fast-Track

(05:23–07:13)

• Executive Order to Expedite Drug Approval:
  President Trump signs an order to speed up FDA review of psychedelic drugs (MDMA, LSD, magic mushrooms) for mental health treatments.
  • Context: Past trial failures, difficulties with placebo tests have slowed approvals.

  “Part of it is it's really hard to do placebo tests with these because the patients...know immediately...”
  —Alex Frankos [06:14]

• Cultural Shift and Political Momentum:
  • The Make America Healthy Again (MAHA) movement embraces psychedelic therapies.

    "Joe Rogan sent a text to the president...within a week he had done this executive order."
    —Alex Frankos [06:52]

5. Middle East Tensions: US–Iran Ceasefire Uncertainty

(07:13–07:55)

• Ongoing confusion over Iran negotiations and the possible extension of a US ceasefire.
• President Trump is unlikely to extend the current truce as deadlines approach.

6. Germany’s Industrial Pivot: From Cars to Cannons

(08:27–13:16)

• German Manufacturing Crisis:

  • Sector loses ~15,000 jobs/month; auto industry in steep profit decline (Mercedes Benz down 49%, Volkswagen 44%, Porsche 98% year-on-year).

• Turning to Defense Production:
  Chief European political correspondent Bojan Panchevsky explains Germany’s response:

  “Germany is in search of a new business model and...figured out that the geopolitical turmoil is here to stay and there will be a growing demand for weapons systems.”
  —Bojan Panchevsky [09:52]

  • Government encourages realignment—matchmaking platforms introduced for manufacturers to link with defense demand.

• Company Case Studies:

  • Schaeffler: Pivoting 10% of $28B turnover to newly founded defense division.
  • Deutz: Engine supplier now focuses on engines for tanks, drones.
  • Volkswagen: Negotiating to supply parts for Israel’s Iron Dome defense system.

• Long-Term Economic Outlook:

  • Defense unlikely to offset the entire auto sector, but Germany is well-positioned for scale and competitiveness with US, France, and UK in arms production.

    “Nobody in NATO will buy Chinese weapons...or Russian weapons...So...Germany is very likely to come up front.”
    —Bojan Panchevsky [12:07]

  • New Role in NATO Supply Chains:

    “For the first time now, these Patriot missiles will be produced in Germany...”
    —Bojan Panchevsky [12:54]

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Notable Quotes & Memorable Moments

• Tim Cook’s Leadership Philosophy:

  “Be yourself, keep a firm North Star on the values of the company...you may be blown off course...but eventually you will come back to the right path.”
  —Tim Cook [01:36]

• Bradley Olsen on Apple’s AI Role:

  “Apple is basically the delivery system for AI...but it's behind its rivals in terms of building models.”
  —Bradley Olsen [02:30]

• Alex Frankos on Psychedelics and Political Advocacy:

  “Joe Rogan sent a text to the president last week and said, hey, you really gotta get on this. And within a week he had done this executive order.”
  —Alex Frankos [06:52]

• Bojan Panchevsky on Germany’s Defense Pivot:

  “If you produce engines, you can pivot from cars to tanks or even to drones.”
  —Bojan Panchevsky [10:07]

• On Industrial Shifts:

  “Germany is in search of a new business model and they figured out that the geopolitical turmoil is here to stay and there will be a growing demand for weapons systems.”
  —Bojan Panchevsky [09:52]

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Important Timestamps

• 00:19 — Apple CEO transition & industry pressures
• 01:36 — Tim Cook’s advice to John Ternus
• 02:30 — Apple’s AI prospects
• 03:14 — Amazon’s AI investment
• 04:33 — Spirit Airlines seeks government help
• 06:14 — Psychedelic drug FDA challenges
• 06:52 — Joe Rogan’s role in influencing drug policy
• 09:52 — Germany’s pivot toward defense
• 10:36 — Examples of German companies shifting production
• 12:46 — Long-term prospects for German defense sector

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Tone and Style

The episode is fast-paced, analytical, and direct—true to the Wall Street Journal’s signature business journalism. The speakers mix in authoritative reporting with accessible summaries and occasionally a drier wit, especially when discussing industry pivots and political oddities.

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Conclusion

This WSJ What’s News episode concisely distills the leadership shakeup at Apple and frames it within the high-stakes race for AI innovation, all while situating the story alongside shifting trends in airline industry stability, an unexpected political embrace of psychedelic mental health treatments, ongoing Middle East diplomacy, and the dramatic reinvention of German manufacturing.

For listeners seeking to understand the business implications behind the day’s headlines—from Silicon Valley to Berlin—this episode offers authoritative insight and context.

Transcript

[Narrator]

Between tariffs, geopolitical shocks and everything else, 2026 has been a lot so far. The Dow Jones Risk Journal podcast delivers inside analysis from our expert newsroom to help you navigate the uncertainties of risk and regulation with new episodes every Friday.

[Luke Vargas]

A changing of the guard at Apple as hardware engineer John Ternus prepares to steer the company into the AI era. Plus, Spirit Airlines looks to Washington for a financial lifeline and the White gives a boost to the psychedelic drug industry.

[Alex Frankos]

A whole slew of companies been trying to take these kind of age old psychedelic drugs like mdma, lsd, magic mushrooms and professionalizing them, turning them into legit treatments for mental illness. And President Trump signed an executive order basically telling the FDA to expedite the review of a bunch of these drugs.

[Luke Vargas]

It's Tuesday, April 21st. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories. Moving your Today as we reported yesterday, Apple will be getting a new CEO come September, when hardware division chief John Ternus takes the reins from Tim Cook. The leadership shakeup is the company's first in 15 years and comes as some critics contend, that Apple needs to rekindle its innovative fire as its rivals pour resources into computing infrastructure and AI tools. And while Ternus will likely feel that pressure, Cook shared this advice for his eventual successor with Journal columnist Ben Cohen in a recent interview.

[Tim Cook]

So I would say, you know, be yourself, keep a firm North Star on the values of the company. Because if, if you get the values right, if you keep the keep the North Star in clear view, you may be blown off course a little bit, but eventually you will come back to the right path. And I have always found that to be true.

[Luke Vargas]

Ternus North Star is likely to be product design, having spent the last 25 years working on everything from AirPods to the iPhone and overseeing a shift from intel to Apple designed chips that's helped solidify the company's command in the hardware space. And though Ternus has little experience with AI, our deputy tech bureau chief Bradley Olsen says Apple isn't entirely out of the race.

[Bradley Olsen]

Apple is basically the delivery system for AI, and will be for the foreseeable future for billions of people that have iPhones and use Apple products. But it's behind its rivals in terms of building models that people will use. And so how Apple thrives in the AI age is definitely an open question. And that's something that Ternus sort of inherits from Cook. Cook's reputation is someone who took the iPhone, which was one of the most successful products of all time and used it to build an empire, which Apple really is today. And so Ternus will maybe have to step into that part of the role and the public facing aspects of being an executive. And I think with Cook staying on as executive chairman, maybe he'll have the space to do that.

[Luke Vargas]

Apple's App Store AI revenue is set to top $1 billion this year simply by collecting subscription fees from companies like OpenAI, and analysts see that role expanding as Apple prepares to release an overhauled version of its Siri Assistant later this Amazon is plowing an additional $5 billion into Anthropic, bringing its total investment in the AI company to as much as $25 billion. The deal will see Anthropic purchase more than $100 billion in Amazon Cloud services, giving it much needed computer power after a recent crunch forced it to throttle the performance of its Claude AI model. Switching gears High fuel prices are heaping more pressure on the aviation industry, leading the owner of Alaska and Hawaiian Airlines to yank its financial guidance. Shares of Alaska Air Group are down off hours after the company forecast roughly $600 million in added expenses, more than enough to wipe out a single digit increase in passengers. And higher costs are leading Spirit Airlines to seek a potential lifeline from the Trump administration. Aviation reporter Ben Katz has the latest as Spirit hopes to stave off potential l liquidation after rising fuel prices thwarted its plans to exit bankruptcy, what we

[Ben Katz]

know is that the administration is in talks with Spirit about potential government aid. That's according to people familiar with the discussions. One of those options would actually be the US government taking a stake in the embattled airline. The government has generally avoided intervening to save a single airline in the past, but it has doled out billions of aid to the industry even as recently as the pandemic. We could learn a bit more about the structure of what Washington is looking into, how it could help the industry. Later today, a bunch of executives from a number of low cost airlines are scheduled to meet with the Transportation Secretary, Sean Duffy. That comes as airlines have really been asking lawmakers to give them some relief from the pressures of these high fuel prices. So whilst Spirit may be in the worst financial shape here, and potentially the most desperate for a lifeline, they're not alone in asking for assistance to deal with the surge in fuel prices.

[Luke Vargas]

Labour Secretary Lori Chavez Darimer is resigning, capping a tumultuous tenure marked by infighting and allegations that she misused government funds, which she denied. Darimer is the third cabinet member to leave in less than two months. After President Trump ousted Pam Bondi and Kristi Noem in March and April, respectively, the White House says that Deputy Labor Secretary Keith Sonderling will be stepping in to run the department. Psychedelic drug stocks surged Monday after President Trump signed an executive order aimed at speeding up research and improving patient access to drugs like like mdma, LSD and ibogaine. The drugs could be used to treat veterans and those addicted to opioids. And the order is expected to speed up approvals of some drugs rapidly to just a few weeks. Here's Journal Business editor Alex Frankos.

[Alex Frankos]

It's been a real struggle for the drug makers to get these treatments approved. MDMA treatment for post traumatic stress disorder was rejected back in 2024. The data just wasn't clean enough. Part of it is it's really hard to do placebo tests with these because the patients, you know, know immediately whether they're taking the placebo or not. So there have been lots of, you know, hurdles and lots of skepticism. But this administration is clearly, you know, more embracing of trying this stuff out.

[Luke Vargas]

And Alex added that Trump's backing of psychedelics for mental health treatment shows just how impactful the Maha movement has become.

[Alex Frankos]

Make America Healthy Again is very much open minded about using these illegal drugs as mainstream treatments for different conditions. This has been an issue that's been advocated by Joe Rogan, the podcaster Joe Rogan sent a text to the president last week and said, hey, you really gotta get on this. And within a week he had done this executive order.

[Luke Vargas]

And with President Trump's latest deadline for Iran looming, there's confusion over whether both the US And Iran will engage in a second round of peace talks. Today in Pakistan, there are unofficial reports that Tehran is sending negotiators, though the country's top negotiator says it won't accept talks held under the shadow of threats. A White House official has said President Trump is unlikely to extend the two week ceasefire ahead of his Wednesday evening deadline. Coming up. Long reliant on its auto manufacturing sector, Germany is reinventing itself into a weapons factory. We've got that story after the break.

[Narrator]

Shifts in geopolitics, tariffs and regulation are rewriting the global playbook for international business. Every Friday on the Dow Jones Risk Journal podcast, our expert journalists and analysts take you inside the news, breaking down the hidden angles on the week's biggest developments, from sanctions and foreign policy shifts to cyber threats and supply chain disruptions. If you want clear insights into how power and policy are shaping global business, risk Follow the Dow Jones Risk Journal podcast wherever you listen.

[Luke Vargas]

Forget guns to butter. Our Bojan Panchevsky reports that German manufacturing is shifting from cars to cannons. Bojan, the rate at which the long standing engine of the German economy seems to be losing speed, it's all very dramatic. Tell us how quickly this is unfolding.

[Bojan Panchevsky]

It's basically manufacturing industries across the board. According to government figures, thousands of jobs are disappearing from German manufacturing manufacturing each month.

[Luke Vargas]

15,000, that's. That's no joke.

[Bojan Panchevsky]

On average a month. Yeah. And then you've got. In the once dominant auto sector, the figures are really striking. Mercedes Benz, the iconic brand, has dropped 49% in profit last year, year on year. Volkswagen said its profit slumped by 44% in the same period. And they also announced that they will cut 50,000 jobs by 2030. And finally, Porsche reported a staggering loss of profit by 98% in 2025 compared to the previous year. Nothing like this has happened in living memory.

[Luke Vargas]

And yet, for all the gloom in autos in particular, it sounds as if geopolitical anxiety is maybe presenting an opportunity for a bit of a pivot here. I'm curious what form that's taking. We reported last week that over in the U.S. the Pentagon have been approaching companies like GM and Ford asking to see if they could help boost weapons production. Is this kind of the same thing happen happening in Germany or is it bigger than that?

[Bojan Panchevsky]

It's kind of bigger than that. Germany is in search of a new business model and they figured out that the geopolitical turmoil is here to stay and there will be a growing demand for weapons systems. And Germany, as one of the leading industrial nations of the world, can supply them. So essentially what happened was the government, but also the companies involved in manufacturing, sat down, strategized and figured out that this is a market they need to tackle. And also they found incredible synergies. Apparently it's not that complicated. You know, if you produce engines, you can pivot from cars to tanks or even to drones.

[Luke Vargas]

Bojan, give us some examples of companies that are making this shift. It sounds like with the encouragement of the government.

[Bojan Panchevsky]

The government is absolutely encouraging this. The government set up a matchmaking platform which is if you own a company in manufacturing, you can go there and find someone who needs components that you're able to make. For example, the company Schaeffler, which is one of the biggest car suppliers in the world and operates eight factories in the United States, is now aiming for 10% of their turnover, which is roughly $28 billion to come from their newly founded defense division, which they set up last year. And they're making all sorts of things from board computers for armored vehicles, components for drones. There's another company I introd the CEO of called Deutz. It's the world's oldest engine maker, and they are now making engines not for cars, but rather for tanks, for unmanned weapons systems, ground drones, or aerial drones. They're making all sorts of stuff that is compatible with what they've always been doing. They don't even have to build new production line. They just have to slightly modify existing production line and slightly retrain workers. And finally, Volkswagen itself is in negotiations with Israeli companies that work on the famous Iron Dome aerial defense system, and they are likely to start producing components for that system in the near future.

[Luke Vargas]

Finally, Bojan, sounds like there's money to be made here, but I have to ask, is defense going to be enough to pick up what's being lost for the German economy when the auto sector is pulling back as it is?

[Bojan Panchevsky]

I mean, obviously, defense cannot replace the rest of the industrial economy that's declining entirely. But you see, Germans are extremely good at scaling up, and there are not that many countries in the world who could compete with them once they get going. Nobody in NATO will buy Chinese weapons, right? Nobody in NATO will buy Iranian weapons or Russian weapons or North Korean weapons, for that matter. So all these countries that can produce cheaper are not actually in the run. So from the companies that are actually competing, you've got the United States, you've got Germany, France, Britain at that kind of scale. And in that group of competitors, Germany is very likely to come up front.

[Luke Vargas]

And there could be a lot of winners here. Right? All those countries sort of trying to increase defense spending and maybe needing to lean on their own domestic manufacturers in some capacity.

[Bojan Panchevsky]

Oh, absolutely. I mean, Germany is now helping the United States, you know, the famous Patriot interceptor system that protects the skies over Ukraine and now the Gulf countries. The American companies that make it have not been able to scale up quickly enough. So a German company stepped in, and for the first time now, these Patriot missiles will be produced in Germany starting from late this year or early next year.

[Luke Vargas]

There you go. Bojan Panchevsky is the Wall Street Journal's chief European political correspondent. Bojan, always a pleasure. Thank you so much.

[Bojan Panchevsky]

My pleasure, Luke.

[Luke Vargas]

And that's it for what's news for this Tuesday morning. Today's show was produced by Daniel Bach and Hattie Moyer. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show, and until then, thanks for listening.

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