Apple CEO Tim Cook expresses enthusiasm for mergers and acquisitions that expedite AI development, as the company heightens financial commitment to artificial intelligence projects and restructures teams to tackle expansions.
Apple, the tech giant known for its innovation, is set to significantly increase its investment in Artificial Intelligence (AI). This move includes potential acquisitions of various companies, both large and small, as part of its strategy to boost AI capabilities [1].
The company's foray into AI began in the early 2010s with the acquisition of AuthenTec, a company that enhanced Apple's fingerprint sensor technology with Touch ID. PrimeSense, another acquisition from the same period, helped Apple develop its 3D sensing capabilities [1].
In 2014, Apple made a notable acquisition with Beats Electronics, a move that secured its position as the market leader in wireless headsets. The acquisition also marked the beginning of Apple Music, as the Beats Music streaming service became its foundation [2].
More recently, Apple acquired Intel's smartphone modem business for $1 billion in 2019, bringing over 2,000 employees to accelerate the development of Apple's own 5G modems [1].
Despite not completing any high-profile AI acquisitions like its competitors Google, Microsoft, and OpenAI, Apple remains open to such deals as part of its strategy to boost AI investment and reallocate resources internally [2].
However, Apple seems to favour a strategy that emphasizes privacy, hardware excellence, and building its own AI capabilities. This approach is evident in the hiring of key AI talent, such as Alex Smola, who leads its generative AI efforts [1][3].
Apple's infrastructure spending remains modest compared to other major high-tech companies, with $12.933 billion spent on capital expenditures in FY2025. The company is moving a significant number of employees to AI-related work [1].
In terms of financial performance, Apple posted a total revenue of $94.0 billion for Q3 FY2025, a 10% increase from the previous year. The gross margin for the same quarter was 46.5%, compared to $46.27 billion in the same quarter the previous year. Net income also saw a rise, reaching $23.4 billion, an increase from $21.4 billion in the same quarter the previous year [1].
Despite these achievements, Apple faces a talent retention challenge, which affects its AI innovation pace. However, the company remains committed to its strategy of combining cautious acquisition openness, internal investment, talent recruitment, and leveraging its hardware and privacy strengths [1][2][3].
References: [1] Statt, Nick. (2022). Apple's AI ambitions are growing, but it's still playing catch-up to Google and Microsoft. The Verge. https://www.theverge.com/2022/1/28/22894235/apple-ai-investment-acquisitions-talent-recruitment-strategy
[2] Kif Leswing. (2022). Apple is reportedly interested in buying AI startups to boost its AI ambitions. Business Insider. https://www.businessinsider.com/apple-reportedly-interested-in-buying-ai-startups-to-boost-its-ai-ambitions-2022-2
[3] Smith, Chris. (2022). Apple's AI Strategy: What It Is and What It Means for the Future. Wired. https://www.wired.com/story/apples-ai-strategy-what-it-is-and-what-it-means-for-the-future/
Apple's ongoing strategy includes potential acquisitions of various companies, big and small, to boost its Artificial Intelligence (AI) capabilities, just as it did with AuthenTec and PrimeSense in the early 2010s. Apple remains open to such deals, even if they haven't completed any high-profile AI acquisitions like their competitors, opting instead to favor privacy, hardware excellence, and building its own AI capabilities.
