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Tim Cook says Apple will ‘significantly’ boost AI spend, may acquire to catch up
While Apple did not name the firms, Cook emphasized the company’s flexible approach to M&A, saying it is not fixated on the size of targets as long as they help advance its AI roadmap.
CEO Tim Cook said Apple is has already acquired around seven companies this year, some of which are AI-related.
Apple is stepping up its artificial intelligence (AI) ambitions. On its Q3 FY25 earnings call, CEO Tim Cook confirmed that the company is “significantly” increasing its investment in AI and has already acquired approximately seven companies this year, some of which are directly focused on AI technologies.
While Apple did not name the firms, Cook emphasized the company’s flexible approach to M&A, saying it is not fixated on the size of targets as long as they help advance its AI roadmap.
"We are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature. We basically ask ourselves whether a company can help us accelerate a roadmap. If they do, then we're interested," Cook said during the company's earnings call.
The announcement marks a notable shift for a company historically cautious about publicizing its AI efforts. While rivals like Google, Meta, and Microsoft are racing ahead with eye-popping capital expenditures, Google has forecasted $85 billion in capex for 2025, Meta up to $72 billion, and Microsoft is spending $30 billion in this quarter alone- Apple remains far more conservative, with projected annual spending of around $14 billion based on its current run rate.
For the June quarter, Apple reported capital expenditures of $3.46 billion, its highest since late 2022. In recent months, Apple has reportedly considered purchasing AI answer engine Perplexity, and French AI startup Mistral.
"Apple has always been about taking the most advanced technologies and making them easy to use and accessible for everyone. And that's at the heart of our AI strategy," he said.
However, Apple’s AI strategy diverges sharply from its cloud-heavy competitors. Instead of building a public cloud business, the company is quietly rolling out its own Private Cloud Compute infrastructure, using custom Apple silicon rather than Nvidia GPUs. This bespoke approach prioritizes user privacy and seamless integration into Apple’s ecosystem.
CFO Kevan Parekh noted that much of Apple’s AI-related investment is reflected in operating expenses, due to its “hybrid model” that leans on both in-house and third-party infrastructure.
On July 31, Apple reported better-than-expected earnings, marking its highest quarterly revenue growth in more than three years, buoyed by strong demand for the iPhone and steady gains in its services division. For the fiscal third quarter ending June 28, the tech giant reported revenue of $94.04 billion, a 10 percent increase from a year earlier, and net income of $24.43 billion.
The earnings marked Apple’s strongest growth since December 2021 and came largely on the back of a 13 percent surge in iPhone revenue, which rose to $44.58 billion. CEO Cook credited the performance to the popularity of the iPhone 16, calling it a significant improvement over last year’s model, with “strong double digits” growth, especially among existing customers upgrading their devices.
“We are very pleased with our record business performance for the June quarter, which generated EPS growth of 12 percent,” said Parekh, Apple’s CFO. “Our installed base of active devices also reached a new all-time high across all product categories and geographic segments, thanks to our very high levels of customer satisfaction and loyalty.”
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