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IMPAAKT
Home Press Room News

Apple Signals Major AI Spending to Compete with Tech Rivals

CEO Tim Cook hints at larger acquisitions and significant data center investments as Apple seeks to accelerate its AI roadmap.

August 1, 2025
in News
Apple
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Apple’s Strategic Shift Toward AI Investment

Apple AI Inc. (AAPL.O) is preparing to ramp up spending on artificial intelligence (AI) to catch up with major competitors like Microsoft and Google. CEO Tim Cook revealed during Apple’s fiscal third-quarter earnings call that the company is open to making substantial investments, including building new data centers and potentially acquiring larger AI-focused companies—a shift from Apple’s historically cautious spending strategy.

 Apple AI Spending

While companies like Microsoft and Alphabet’s Google are pouring billions into AI—Microsoft is on track to spend over $100 billion, and Google is planning $85 billion—Apple has remained comparatively conservative. Until now, the Cupertino-based tech giant has relied heavily on external data center providers and has focused on developing much of its AI technology internally. This includes planned enhancements to Siri, which have been delayed until next year.

Apple AI Spending

Potential for Larger Acquisitions

Traditionally, Apple has preferred acquiring smaller, specialized firms to build specific capabilities. Its largest past acquisition was Beats Electronics for $3 billion in 2014, followed by a $1 billion purchase of Intel’s modem chip business. However, Cook signaled a potential shift:

“We’re very open to M&A that accelerates our roadmap. We are not stuck on a certain size company,” Cook said. “We basically ask whether a company can help us accelerate our roadmap, and if they do, then we’re interested.”

In 2025 alone, Apple has already acquired seven smaller companies. Analysts speculate that Apple might consider acquiring larger AI players as part of its renewed push into the sector.

AI-Driven Safari and Search Innovations

Apple is also reportedly exploring ways to revamp its Safari browser using AI-powered search technology. This move could help the company reduce its reliance on Google, which currently pays Apple tens of billions annually to remain the default search engine on iPhones. That agreement is under scrutiny in U.S. courts due to ongoing antitrust cases.

Bloomberg has reported that Apple has even discussed acquiring AI-powered search startup Perplexity, though Reuters has not confirmed this. Such a purchase would signal a significant strategic pivot, aligning with Apple’s broader ambition to enhance its AI-driven ecosystem.

Apple

Increased Data Center Investment

CFO Kevan Parekh noted during the earnings call that Apple plans to substantially increase its spending on data centers to support AI initiatives. Historically, Apple has invested only a few billion dollars annually in this area. However, Parekh emphasized that future spending will see a meaningful rise:

“It’s not going to be exponential growth, but it is going to grow substantially. A lot of that’s a function of the investments we’re making in AI,” Parekh explained.

Apple is leveraging its proprietary chip designs to handle AI-related tasks, focusing on maintaining the company’s hallmark privacy standards across devices and cloud services.

The Road Ahead for Apple in AI

Apple faces mounting pressure to compete with AI-powered services like ChatGPT and advanced digital assistants offered by rivals. Despite its partnership with OpenAI for select iPhone features, Apple has yet to make a significant breakthrough in the AI market.

With plans for larger acquisitions, revamped search capabilities, and increased infrastructure investment, Apple is signaling a bold shift in strategy. Whether this will be enough to catch up with established leaders in AI remains to be seen, but it marks a pivotal moment for the company’s future.


Read more impactful business insights in IMPAAKT, the leading top business magazine for AI and tech innovation trends.

Tags: AIAppleArtificialIntelligenceBusinessStrategyDataCentersIMPAAKT NewsTechNewsTimCook

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