Published by Global Banking & Finance Review®
Posted on August 1, 2025
3 min readLast updated: January 22, 2026
Add as preferred source on GoogleApple CEO Tim Cook announces a strategic shift in AI investment, focusing on data centers and potential acquisitions to enhance AI capabilities.
By Stephen Nellis
SAN FRANCISCO (Reuters) -Apple CEO Tim Cook signaled on Thursday the iPhone maker was ready to spend more to catch up to rivals in artificial intelligence by building more data centers or buying a larger player in the segment, a departure from a long practice of fiscal frugality.
Apple has struggled to keep pace with rivals such as Microsoft and Alphabet's Google, both of which have attracted hundreds of millions of users to their AI-powered chatbots and assistants. That growth has come at a steep cost, however, with Google planning to spend $85 billion over the next year and Microsoft on track to spend more than $100 billion, mostly on data centers.
Apple, in contrast, has leaned on outside data center providers to handle some of its cloud computing work, and despite a high-profile partnership with ChatGPT creator OpenAI for certain iPhone features, has tried to grow much of its AI technology in-house, including improvements to its Siri virtual assistant. The results have been rocky, with the company delaying its Siri improvements until next year.
During a conference call after Apple's fiscal third-quarter results, analysts noted that Apple has historically not done large deals and asked whether it might take a different approach to pursue its AI ambitions. CEO Cook responded that the company had already acquired seven smaller companies this year and is open to buying larger ones.
"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," Cook said. "We basically ask ourselves whether a company can help us accelerate a roadmap, and if they do, then we're interested."
Apple has tended to buy smaller firms with highly specialized technical teams to build out specific products. Its largest deal ever was its purchase of Beats Electronics for $3 billion in 2014, followed by a $1 billion deal to buy a modem chip business from Intel.
But now Apple is at a unique crossroads for its business. The tens of billions of dollars per year it receives from Google as payment to be the default search engine on iPhones could be undone by U.S. courts in Google's antitrust trial, while startups like Perplexity are in discussions with handset makers to try to dislodge Google with an AI-powered browser that would handle many search functions.
Apple executives have said in court they are considering reshaping the firm's Safari browser with AI-powered search functions, and Bloomberg News has reported that Apple executives have discussed buying Perplexity, which Reuters has not independently confirmed.
Apple also said on Thursday it plans to spend more on data centers, an area where it typically spends only a few billion dollars per year. Apple is currently using its own chip designs to handle AI requests with privacy controls that are compatible with the privacy features on its devices.
Kevan Parekh, Apple's chief financial officer, did not give specific spending targets but said outlays would rise.
"It's not going to be exponential growth, but it is going to grow substantially," Parekh said during the conference call.
"A lot of that's a function of the investments we're making in AI."
(Reporting by Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and Tom Hogue)
Tim Cook indicated that Apple is ready to spend more to catch up in artificial intelligence, including building more data centers or considering mergers and acquisitions.
Apple has tended to acquire smaller firms with specialized technical teams, with its largest deal being the purchase of Beats Electronics for $3 billion in 2014.
Apple plans to increase its spending on data centers, an area where it typically invests only a few billion dollars per year, as part of its strategy to enhance AI capabilities.
Apple's revenue from Google as the default search engine on iPhones could be jeopardized by U.S. regulatory actions, prompting discussions about integrating AI into its Safari browser.
Apple's CFO, Kevan Parekh, mentioned that while spending on AI won't see exponential growth, it will increase substantially as part of their investment strategy.
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