Apple Signals Major AI Investment Shift Amid Rising Competition

Apple CEO Tim Cook announced the company is prepared to boost spending on artificial intelligence, signaling a potential departure from its traditionally cautious approach to acquisitions and infrastructure. Speaking after Apple’s fiscal third-quarter earnings, Cook said the iPhone maker is open to larger mergers and acquisitions to accelerate its AI roadmap, noting seven smaller firms have already been acquired this year.

The move comes as Apple struggles to match the rapid AI advancements of Microsoft and Google, both investing tens of billions in AI-powered chatbots and data centers. Microsoft is projected to spend over $100 billion, while Google plans about $85 billion in the next year. Apple, which has relied on external data centers, now plans to increase its own infrastructure investments, leveraging custom chips to handle AI tasks with strong privacy protections.

Apple’s AI development, including upgrades to its Siri virtual assistant, has faced delays until next year. Meanwhile, the company is reportedly exploring AI-powered search features for its Safari browser and has been linked to talks about acquiring AI startup Perplexity. This strategy could help Apple hedge against potential disruptions if U.S. courts end Google’s lucrative default search engine deal on iPhones.

Chief Financial Officer Kevan Parekh confirmed AI-related spending will rise significantly, though not exponentially. Apple’s last major acquisition was Beats Electronics for $3 billion in 2014, highlighting the scale of potential new deals.

Shares of Apple (NASDAQ: AAPL) rose 1.7% in premarket trading following the announcement, reflecting investor optimism as the company ramps up efforts to compete in the intensifying AI race.