Apple is investing billions in AI to compete with Microsoft and Google
Apple’s CEO, Tim Cook, announced the company’s commitment to invest billions of dollars in artificial intelligence, signaling a major strategic pivot. The investment will be aimed at building new data centers and potentially acquiring a larger player in the AI industry, moving away from Apple’s traditionally cautious spending habits.
For years, Apple maintained a conservative approach while competitors like Alphabet and Microsoft aggressively expanded their AI capabilities. However, with AI now redefining the technology landscape—particularly in productivity tools—Apple is changing course to keep pace.
Despite this effort, Apple faces challenges in catching up. Apple has yet to reach this scale, unlike Microsoft and Alphabet, which have attracted huge user bases with advanced AI assistants and chatbots. The two rivals have heavily invested in AI infrastructure—Google plans to invest up to $85 billion by 2026, while Microsoft aims for $100 billion. This spending frenzy has pushed Apple to ramp up its own AI investments to remain competitive in a rapidly evolving ecosystem.
Cook emphasizes the urgency of reaching their goal quickly
Over the past few years, Apple’s products have developed under weak improvement strategies due to several factors. To start, the tech company has increased its reliance on an external cloud provider, OpenAI, which built and designed ChatGPT, for its cloud computing activities instead of exploring its own powerful AI models to perform these tasks and enhance productivity.
Another factor is that even though the tech giant relies on OpenAI, most of its AI technology, including its virtual assistant Siri, has been improved internally using weak AI setups. These setups have delayed the process of enhancing their AI technology, postponing the launch of their products.
As a result, these factors have led to a drastic drop in Apple’s financial status in the third fiscal quarter. This has raised concerns among financial leaders. Following the research results, leaders discovered that the tech giant was avoiding initiating large deals that could massively increase its revenues and improve its financial status.
To address this issue, they urged Tim Cook to help the company change this mindset to achieve its AI goals. In response, Cook highlighted that Apple had already purchased seven small companies and is currently considering larger firms.
In a statement, Cook said they were ready to embrace mergers and acquisitions that could increase their chances of reaching their goal. 'We are not limiting ourselves to companies of a certain size, even though those we have acquired this year were small,' he added.
Regarding their acquisitions, the CEO mentioned that what they are looking for is a company that can help them achieve their goals more quickly. With this capability, Cook stated that they could proceed with the purchase without considering its size.
Apple is weighing various alternatives amid uncertainties surrounding the antitrust lawsuit against Google
Although Cook emphasizes that they do not prioritize the size of a company, reports from sources reveal that Apple has acquired smaller companies with a team of skilled tech workers who can enhance specific products.
An example of these companies includes Beats Electronics. Apple acquired the company for $3 billion. Later, it purchased a modem semiconductor company from Intel for about $1 billion.
Currently, the tech giant is facing a crucial moment for its business. This situation arises from an antitrust lawsuit against Google.
Notably, Google was defined as the default search engine on iPhones. In return, it pays billions of dollars each year for this. Therefore, with the ongoing lawsuit, U.S. courts threaten to impact these revenues, pulling down Apple’s annual income.
On the other hand, this seems to be an opportunity for other startup search engines like Perplexity, which are trying to develop AI browsers capable of handling multiple research tasks simultaneously.
Meanwhile, Apple mentioned that it is considering using AI to update search features on the Safari browser. Additionally, the tech giant has reportedly discussed purchasing Perplexity; however, this has yet to be confirmed.
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