And it tries to rent more capacity than to create its own.
Speaking at the quarterly earnings conference, Apple executives noted CNBCwere forced to admit that from the second calendar quarter the company began to increase spending on the development of infrastructure for artificial intelligence systems, but in fact both the dynamics of this growth and the absolute values of the amounts spent remain modest.
Image source: Apple
Last quarter, Apple spent $2.15 billion on real estate and equipment. That’s 3% more than the same period last year, and 8% more on a sequential basis. However, compared to its competitors, such expenses seem ridiculous, especially considering that not all of the indicated amount was spent specifically on developing AI infrastructure.
By comparison, Microsoft increased its capital expenditures by 55% to $13.87 billion last quarter. Google’s parent company, Alphabet, increased its core expenses by 91% to $13.19 billion, and Meta Platforms, which is recognized as an extremist organization in Russia, increased its capital expenditures by 31% to $8.3 billion. At the same time, the head and founder of the latter, Mark Zuckerberg, sees a threat in the potential dominance of one of the competitors, including Apple, in the new emerging market segment, and therefore believes that it is better to risk billions of dollars in investment than to try to save them and end up lagging behind rivals for ten or fifteen years.
Apple CEO Tim Cook explained that the company is taking a hybrid approach to building its AI computing infrastructure, and therefore a significant portion of capital expenditures are borne by its partners who lease server capacity to it. These are Alphabet, Amazon, and Microsoft. However, Apple plans to create its own computing centers in the future that process requests from artificial intelligence systems. It is possible that they will include Apple’s own processors, but for now the company relies on Google components, avoiding more expensive NVIDIA solutions.
