Even Apple is leaning into AI spending
After taking a more disciplined approach, Apple is spending more on AI capex, but didn’t give much info on strategy.
Apple more disciplined approach to AI spending seems to have failed it, as its AI capabilities continue to lag its peers and its upgraded AI assistant is still a ways off (expected “next year”).
But as its Big Tech peers report blockbuster earnings thanks to blockbuster spending on AI, Apple seems to have changed its tune.
To wit, this is what CEO Tim Cook said in January, around the time DeepSeek’s lower-cost models hit the scene and it momentarily looked like Apple’s strategy of measured AI investment was a good one. AI was mentioned about five times on that call:
“From a capex point of view, we’ve always taken a very prudent and deliberate approach to our expenditure, and we continue to leverage a hybrid model, which I think continues to serve us well.”
And this was what Cook said last night on the company’s earnings call for the period ending in June, when the term “AI” was dropped about 20 times:
“We see AI as one of the most profound technologies of our lifetime. We are embedding it across our devices and platforms and across the company. We are also significantly growing our investments.”
Apple’s quarterly spending on purchases of property and equipment grew about 60% year on year, according to data from FactSet, to $3.5 billion. Year to date, that spending is up about 45%. While that’s still a drop in the bucket compared to its Big Tech peers, it’s growth nonetheless. The company also says it plans to significantly grow its AI investment in the September quarter.
Regarding what Apple plans to do with that increased AI investment, Cook was a bit lighter on Apple’s actual AI strategy and didn’t mention specific acquisitions besides saying the company is “very open to M&A that accelerates our road map.”
“Our focus from an AI point of view is on putting AI features across the platform that are deeply personal, private and seamlessly integrated. And of course, we’ve done that with more than 20 Apple Intelligence features so far from visual intelligence to cleanup to writing tools and all the rest... We are also reallocating a fair number of people to focus on AI features within the company. We have a great team, and we're putting all of our energy behind it.”
