Apple, long known for its conservative spending strategy, appears to be changing gears when it comes to artificial intelligence. During the company's fiscal Q3 earnings call, CEO Tim Cook revealed Apple is now willing to ramp up spending to accelerate its AI roadmap.
This may include investments in building more data centers or even acquiring a major AI player, marking a notable departure from Apple’s traditionally modest acquisition history.
“We’re very open to M&A that accelerates our 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,” CEO Tim Cook stated. “We basically ask ourselves whether a company can help us accelerate a roadmap, and if they do, then we’re interested.”
Apple’s renewed urgency comes amid growing dominance from rivals Microsoft and Google, both of whom have integrated AI extensively across their services. Microsoft is on track to spend over $100 billion, and Google plans to invest $85 billion—primarily to scale their AI infrastructure and user base via chatbots and virtual assistants.
In contrast, Apple has lagged behind, relying on external cloud services for AI workloads and largely developing its AI tools in-house. Despite the much-publicized partnership with OpenAI to integrate ChatGPT into iPhones, Apple’s AI efforts—especially upgrades to Siri—have faced delays, with improvements now pushed to next year.
Historically, Apple’s acquisitions have been smaller and more targeted. Notably, its biggest deal to date was the $3 billion acquisition of Beats Electronics in 2014, followed by a $1 billion purchase of Intel’s modem business. This year, Apple has quietly acquired seven small companies to bolster its AI efforts.
Still, the tone is changing. Cook’s comments suggest Apple may now consider larger mergers and acquisitions to stay competitive in the fast-evolving AI space.
Apple also confirmed plans to substantially increase its investment in data centers—a core requirement to process and store AI workloads. While Apple CFO Kevan Parekh didn’t specify exact spending figures, he emphasized the rise will be significant:
“It’s not going to be exponential growth, but it is going to grow substantially,” Parekh noted. “A lot of that’s a function of the investments we’re making in AI.”
Apple is also leveraging its custom-designed chips to handle AI processing on devices while maintaining its hallmark privacy standards.
The company is also under pressure to rethink its search strategies. Its existing agreement with Google—worth tens of billions annually—faces uncertainty due to an ongoing antitrust case in U.S. courts. Emerging companies like Perplexity, which is developing an AI-powered browser, are reportedly in talks with handset makers to replace Google’s dominance.
Interestingly, Apple has reportedly held internal discussions about acquiring Perplexity, though Reuters has not independently verified this. This move could help Apple reshape its Safari browser with AI-enhanced search functionality—reducing its dependence on Google.
Apple is at a pivotal moment in its journey to catch up in the rapidly evolving world of artificial intelligence. As rivals like Microsoft and Google invest over $100 billion and $85 billion respectively into AI infrastructure and tools, Apple is signaling a major shift in strategy.
CEO Tim Cook’s statement reflects a readiness to open the company’s deep financial reserves to pursue meaningful mergers and acquisitions, including potentially larger companies — a move that diverges from Apple’s historically cautious M&A approach.
The company is also preparing to significantly increase investments in data centers and AI capabilities across its ecosystem, particularly by enhancing Siri and integrating AI-powered features into Safari. With growing pressure from emerging AI players and the looming impact of Google’s antitrust trial, Apple’s willingness to ramp up its AI roadmap could determine its future competitiveness.
If executed effectively, Apple may yet emerge as a formidable force in the global AI race.