Tim Cook: Apple's AI Investment as Pivotal as Internet or Smartphone
Apple CEO Tim Cook recently addressed employees at a rare all-hands meeting in Cupertino, emphasizing artificial intelligence as a pivotal technology on par with the internet or the smartphone. While acknowledging Apple’s late entry into the AI race, Cook affirmed the company’s commitment to aggressive investment, stating, “Apple must do this. Apple will do this. This is sort of ours to grab.”
Cook highlighted Apple’s historical strategy of not being the first to market, citing examples like personal computers and smartphones, yet consistently defining industry standards. He expressed the same sentiment for AI, indicating Apple’s ambition to shape its future. This declaration follows mounting pressure from competitors and significant internal shifts within the tech giant.
In response, Apple is significantly increasing its spending on AI projects, with CFO Kevan Parekh confirming that AI investments are a primary driver of the company’s current expenditure growth. Over the past year, Apple hired 12,000 new employees, with 40 percent joining research and development efforts. Internally, Apple is reallocating personnel to focus on AI-centric initiatives, aiming to integrate new AI features across its entire platform ecosystem. The company’s stated focus remains on delivering personal, privacy-focused, and seamless user experiences.
A cornerstone of Apple’s AI infrastructure involves relying on its own servers powered by custom-designed chips, referred to as “Private Cloud Compute,” rather than external vendor hardware like Nvidia. Unlike some competitors, Apple operates a hybrid cloud model, leveraging partner solutions for its infrastructure needs. This strategic choice also comes as Apple has reportedly struggled with a major shortage of computing power, forcing a partial shift away from its longstanding strategy of exclusively on-device data processing.
A major undertaking is the complete rebuilding of Siri. Software chief Craig Federighi informed staff that Siri is being reconstructed from the ground up on a unified architecture, with a new version anticipated in 2026. This significant overhaul follows reports of past technical setbacks and internal management issues that delayed Siri updates. Power struggles between Apple’s AI group, led by John Giannandrea, and Federighi’s software team reportedly stalled development, leading to Federighi now overseeing Siri.
Apple is also actively developing its own AI chips and constructing a new data center in Houston to support these efforts. Despite this increased investment, Apple’s capital expenditures remain conservative compared to rivals like Google, Meta, and Microsoft, who plan to spend tens of billions. Cook, however, downplayed concerns that emerging AI devices could replace the iPhone, viewing them as complementary rather than competitive.
To bolster its AI capabilities, Apple has expressed openness to acquisitions of any size that align with its AI strategy. This year alone, the company has acquired approximately seven firms, predominantly smaller companies, though not all were directly AI-related. This flexible acquisition approach, coupled with new investments, appears to be Apple’s response to addressing both strategic and personnel gaps. The company has faced a notable talent exodus, with competitors like Meta reportedly luring away key AI researchers with lucrative contracts. Consequently, Apple is reportedly considering a significant strategic shift, including discussions with OpenAI and Anthropic about potentially using their models for Siri. Under Federighi’s leadership, Apple is said to be open to integrating open-source models if they prove superior to its internal developments.
This strategic pivot underscores Apple’s determination to establish a dominant position in the rapidly evolving field of artificial intelligence, aligning with Cook’s vision of AI as a transformative technology that Apple is uniquely positioned to “grab.”