While many of the largest tech companies race to build massive data centers for their artificial intelligence ambitions, Apple is taking a more modest approach.
In its fiscal 2025, which ended in September, Apple spent $12.72 billion on capital expenditures. Compared to Alphabet, Meta, Microsoft, and Amazon, Apple is barely spending at all.
Apple’s restrained approach to AI hasn’t hurt its hardware sales. CEO Tim Cook told CNBC Thursday that consumer response to the company’s iPhone 17 models was “off the chart.”
Instead of simply buying as many AI chips as possible, Apple buys computing capacity from outside partners, finance chief Kevan Parekh explained Thursday on the company’s fourth quarter earnings call.
When Apple does build servers for its AI software, the company is using its own chips — not those from Nvidia or AMD — to power a service it calls Private Cloud Compute.
“I don’t see us moving away from this hybrid model, where we leverage both first-party capacity as well as leverage third-party capacity,” Parekh said.
Alphabet said it expects to spend about $92 billion on capital expenditures this year. Microsoft said it spent about $34.9 billion on capex during the September quarter and will spend more in capex for its fiscal 2026 than it did the year prior. Meta stock got whacked after CEO Mark Zuckerberg defended the company’s plan to spend about $71 billion on AI chips and other expenses in 2025. On Thursday, Amazon raised its 2025 spending forecast 6% to $125 billion…
In its fiscal 2025, which ended in September, Apple spent $12.72 billion on capital expenditures.
And yet, that’s up 35% from what it spent last year, a significant increase. Parekh said Apple is expecting further increases. Analysts expect Apple’s capex to increase to $14.3 billion this year, according to FactSet.
“In ’25 we did have capex costs associated with building out our Private Cloud Compute environment in our first party data centers,” Parekh said.
MacDailyNews Take: Think Different
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Doing more with less is fine, if your products can compete. When the new Siri finally debuts next year, we’ll find out if Apple’s strategy is working or not.
For now, Apple Intelligence’s underwhelming feature set hasn’t hurt, as the company predicts that overall sales will rise between 10% and 12% in the December quarter.
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