While Amazon burns through $125 billion and Meta drops $71 billion on AI infrastructure, Apple is playing an entirely different game. The iPhone maker spent just $12.7 billion on capital expenditures in fiscal 2025 - a fraction of its megacap peers - yet CEO Tim Cook says iPhone 17 demand is "off the chart" thanks to Apple Intelligence features.
Apple just delivered the most contrarian earnings call of Big Tech's AI spending spree, and Wall Street is taking notice. While every other megacap company justified massive capital expenditure increases as essential for AI dominance, Apple's finance chief Kevan Parekh calmly explained why his company spent a mere $12.7 billion - roughly one-tenth of Amazon's projected $125 billion outlay.
"I don't see us moving away from this hybrid model, where we leverage both first-party capacity as well as leverage third-party capacity," Parekh told analysts Thursday. The statement landed like a mic drop after Meta got "whacked" - as CNBC put it - for defending Mark Zuckerberg's $71 billion AI spending plan just 24 hours earlier.
The numbers tell a stark story. Google's parent Alphabet expects to spend $92 billion on capital expenditures this year, while Microsoft dropped $34.9 billion in just the September quarter alone. Yet Apple's modest $12.7 billion - up 35% from last year - somehow produced what CEO Tim Cook called "off the chart" iPhone 17 demand, with overall sales projected to rise 10-12% in the December quarter.
Apple's secret weapon isn't spending more, it's spending smarter. Instead of joining the Nvidia chip-buying frenzy, the company built its own silicon specifically for AI workloads. When Apple does need massive compute capacity, it simply rents it from cloud providers rather than constructing billion-dollar data centers. The approach extends to Apple Intelligence, the company's AI suite that runs locally on iPhones using Apple's own chips, only calling external services like OpenAI's ChatGPT for complex queries.
This hybrid strategy has already begun paying dividends through Apple's Private Cloud Compute system, powered entirely by Apple silicon rather than industry-standard Nvidia or AMD chips. Earlier this month, the company announced it was shipping these custom servers from a factory in Houston, marking a rare instance of Apple manufacturing critical infrastructure domestically.
