Going out on a limb.. Why did Apple distance itself from the AI race?..
As major tech companies race to build massive data centers to fuel their AI ambitions, Apple is taking a more conservative and pragmatic path.
Rather than buying large quantities of AI chips like its competitors, the company prefers to rely on a combination of its own capabilities and lease computing power from external partners, the company's chief financial officer Kevan Barik explained during the company's recent financial results announcement.When Apple builds its own servers to run AI software, it uses its own chips, not Nvidia or AMD's chips, to run what it calls a private cloud computing service.
Private Cloud Compute is a cloud architecture developed by Apple to support advanced AI capabilities within the Apple Intelligence system, as it processes sensitive data that is difficult to process in its devices via private servers designed with strict privacy standards, without constantly storing information or exposing it to external risks.Spending modest compared to competitorsThe announcement of Apple's financial resultscoincided with a busy week of financial results announcements from companies such as Google, Microsoft, Meta and Amazon, all of which announced plans to massively increase their spending to secure the computing power needed to develop the next generation of artificial intelligence technologies.Google expected to spend about $92 billion by the end of the year, while Microsoft spent about $34.9 billion in the quarter ended September.Meta shares fell after Mark Zuckerberg announced the company's intention to spend about $71 billion by the end of 2025, while Amazon raised spending estimates to $125 billion.Apple, on the other hand, seemed cautious compared to all of that. Its spending in fiscal year 2025 amounted to only about $12.72 billion, an increase of 35% from the previous year. However, these figures reflect an acceleration in the pace of investment.Investing in PrivateCloud Computing Apple explained that a large part of the spending in 2025 was dedicated to building a Private Cloud Compute environment within its data centers. Earlier this month, Apple announced the start of shipping of its new servers from its factory in the US city of Houston.The expansion follows the company's launch last year of Apple Intelligence, an AI toolkit that runs on Apple's own chips that enables summarizing notifications, creating new images and emojis, and passing complex queries to OpenAI's ChatGPT.
