While Amazon throws $125 billion and Meta commits $71 billion at AI infrastructure, Apple is playing a completely 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. This isn't about being cheap; it's about being strategic.
Apple just closed the books on the most expensive AI arms race in tech history - and barely participated. While every other megacap gorged on data center spending, Apple's finance chief Kevan Parekh calmly explained the company's contrarian approach during Thursday's earnings call.
"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 said. Translation: Why build massive server farms when you can rent computing power and focus on what you do best?
The numbers tell a stark story. Alphabet expects to blow $92 billion on capital expenditures this year. Microsoft dropped $34.9 billion just in the September quarter. Meta got hammered by investors after Mark Zuckerberg defended spending $71 billion on AI chips and infrastructure. Amazon raised its 2025 forecast to $125 billion on Thursday.
Apple's response? A modest $12.7 billion in fiscal 2025 capex. That's barely a rounding error compared to its peers, yet it represents a 35% jump from last year - suggesting Apple isn't ignoring AI, just approaching it differently.
The strategy centers on Apple's Private Cloud Compute, powered entirely by the company's own M-series chips rather than Nvidia or AMD processors that everyone else is fighting over. When Apple needs additional computing muscle, it simply buys capacity from cloud providers instead of building new data centers.
This approach started paying off earlier this month when Apple announced it was shipping AI servers from a new Houston factory - custom hardware designed specifically for Apple Intelligence workloads.
But here's where it gets interesting: Apple Intelligence, the AI suite that was supposed to justify this measured approach, has received mixed reviews from critics. The improved Siri assistant, arguably the most important piece, was back in May.
