Both the computing requirements and the data requirement on modern AI make it a challenging fit. So it will be a curiosity about how Apple tries to balance a feature set that they can power on the phone, net take advantage of the modern AI capabilities.
Or, just bail, and funnel it to the net.
Unless you want to charge a subscription for a feature it really isn't smart for Apple to try something like this.
Apple is super stingy about RAM capacity on their devices, which is a problem for GenAI
Also, the M1 NPU (the equivalent to Google's offloading) is not very fast in Apple's own Stable Diffusion port, and I'm not aware of any community LLM frameworks that even use the NPU. They all run Metal implementations on the M1's GPU.
Their device features has been behind android for quite some time, with only a slight edge in overall maxed out performance.