Apple quietly acquires 7 startups, eyes more AI acquisitions as investment ramps up

Apple isn’t known for big reveals on earnings calls, especially not when it comes to future strategy. But this time, Tim Cook gave analysts a little more to chew on.

After reporting a 10% year-over-year revenue bump in its third-quarter earnings, Apple made it clear that AI is moving up the priority list. Cook didn’t roll out any flashy product announcements or big acquisitions on the call, but he did confirm what many have suspected: Apple is ramping up its investment in AI — and it’s willing to spend more, fast.

“We’re very open to M&A that accelerates our roadmap,” Cook told analysts. “We are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature.”

So far this year, Apple has acquired “around” seven companies, CNBC reported. Cook didn’t name them, and not all were focused on AI, but the messaging was clear — Apple is actively scouting for teams and technology that can plug into its growing AI plans.

The update comes just six months after Apple announced a massive $500 billion U.S. investment plan, which includes ramping up manufacturing, hiring 20,000 workers, and expanding its chip and server operations.

Apple to ‘Significantly’ Boost AI Investment Amid $14B Capex Pivot

Compared to its Silicon Valley peers, Apple has taken a quieter approach. It’s never led the pack in capital spending, especially when it comes to AI infrastructure. During the June quarter, Apple spent $3.46 billion on capital expenditures — the most it’s shelled out since late 2022, and up from $2.15 billion a year earlier. Multiply that pace by four, and Apple’s on track for about $14 billion in annual capex.

That number still lands well below the likes of Google, Meta, and Microsoft. Google recently projected $85 billion in capex for fiscal 2025. Meta is aiming for as much as $72 billion, and Microsoft is guiding $30 billion — just for the current quarter.

Cook doesn’t seem too concerned. “We are significantly growing our investment. We did during the June quarter. We will again in the September quarter,” he said, adding that Apple is now moving people around internally to prioritize AI work.

“We are also reallocating a fair number of people to focus on AI features within the company,” Cook said. “We have a great team, and we’re putting all of our energy behind it.”

That doesn’t mean Apple plans to follow the same playbook as everyone else. Google and Microsoft both run massive cloud platforms and are spending heavily to rent out AI computing power. Apple doesn’t have that business model. According to Apple finance chief Kevan Parekh, the company follows more of a “hybrid” model — working with partners to access the systems it needs, while accounting much of it as operating expenses.

Part of Apple’s investment is going into what it calls Private Cloud Compute — servers using its own chips instead of third-party options like Nvidia’s. Parekh said much of Apple’s spending growth is being driven by AI-related investments.

Still, questions remain about how all this effort will show up in products. Cook pushed back against the idea that AI-powered devices might one day compete with the iPhone. He referenced the $6.5 billion deal between former Apple design chief Jony Ive and OpenAI, but didn’t seem fazed.

“It’s difficult to see a world where iPhone’s not living in it,” Cook said. “That doesn’t mean that we are not thinking about other things as well, but I think that the devices are likely to be complementary devices, not substitution.”

Cook was careful not to give away too much of Apple’s playbook. When asked if large language models — the tech that powers tools from OpenAI and Anthropic — are at risk of becoming commoditized, he passed.

What he did say was this: “The way that we look at AI is that it’s one of the most profound technologies of our lifetime. It will affect all devices in a significant way.”

That’s about as direct as you’ll get from Apple. And in typical Apple fashion, they’re not saying much — but they’re clearly making moves behind the scenes.