Apple Chief Executive Tim Cook said the company sees “enormous opportunities” in artificial intelligence despite spending less on infrastructure than some of its largest technology rivals.
Speaking after Apple’s quarterly earnings, Cook said the company’s AI strategy relies on a hybrid model that processes some requests directly on iPhones and Macs rather than entirely through cloud infrastructure. Shares came under pressure following the results amid concerns over supply constraints and the company’s outlook.
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Device-Based AI Differentiates Strategy
Cook said Apple’s ability to process certain AI requests on-device provides a competitive advantage.
“The ability to run some percentage of requests on device is also very strategic and sort of a competitive weapon,”
he said.
The approach differs from that of Microsoft, Alphabet, Amazon and Meta, which have committed billions of dollars to expanding AI infrastructure and data centres. Apple reported capital expenditure of $2.46 billion in the June quarter, below the StreetAccount estimate of $3.44 billion. Cook said operating expenses are increasing and the company continues to invest in AI.
Focus On Privacy And Efficiency
Apple said many Apple Intelligence features are designed to run on users’ devices rather than remote servers. Cook cited Disney as an example of a company using Macs for on-device AI workflows, saying the approach helps reduce cloud token costs while protecting intellectual property.
Siri Rollout Will Test Hybrid Model
Apple plans to introduce an upgraded Siri this fall using the iPhone’s processor to interpret requests and determine which on-device model should handle them.
The company said more complex requests, including some image-generation tasks, will continue to rely on cloud infrastructure. Apple has previously said those workloads use Google Cloud infrastructure powered by Nvidia graphics processors and Intel central processors.
Apple Eyes AI Revenue Through Services
Cook said Apple has not yet finalised plans to charge customers directly for AI features but sees opportunities to expand iCloud+ subscriptions.
“We do believe there will be people that want to use it a lot, and so we will have some kind of upgrade possibilities on iCloud+,”
he said.
