Apple Spends Less on AI Than Anyone — and May Win Anyway

Apple spent only about $13 billion on capital expenditures across all of fiscal 2025, and its capital expenditures for the first two quarters of fiscal 2026 have totalled just $4.3 billion — down from $6 billion in the same period last year. In a year when Google plans to spend $190 billion and Amazon $200 billion on AI infrastructure, Apple's restraint looks either visionary or reckless. The evidence is increasingly pointing toward visionary.

The Numbers That Matter

Apple's earnings per share rose 22% year over year in its fiscal second quarter. The company's services business accelerated to 16% revenue growth. Services — including the App Store, Apple Music, iCloud and increasingly AI-powered features — now run at a gross margin of approximately 77%. Products run at 39%. Every dollar Apple shifts from hardware to services is a dollar working harder.
Apple boasts an active installed base topping 2.5 billion devices. No AI company on earth can match that distribution advantage. Google has Search. Meta has social networks. Amazon has AWS. Apple has 2.5 billion devices in people's pockets, on their wrists and in their homes.

The Siri Bet

Apple is collaborating with Google on foundation models to power Siri — doing so without bankrolling its own hyperscale data centre build-out. CEO Tim Cook said the company is bringing "a more personalised Siri to users coming this year."
This is the core of Apple's AI strategy: rent intelligence from the best available model, deliver it through hardware no competitor can match, and monetise it through services that generate 77% gross margins.

What This Means for GAFAM

Apple is the only GAFAM member that is not in an AI spending arms race. It is choosing to be a distributor and monetiser of AI rather than a builder of AI infrastructure. If a more personalised Siri delivers even a fraction of what Google's Gemini or Microsoft's Copilot promise, Apple will have achieved it at a fraction of the cost.
That could become a meaningful free cash flow advantage if Apple can still deliver good AI to its users without spending like its peers are.

The European Perspective

Apple's privacy-first positioning resonates strongly in Europe, where data protection is not a marketing point but a legal requirement. If Apple Intelligence continues to process data on-device rather than in cloud data centres, it may face significantly lighter regulatory scrutiny under the EU AI Act than its GAFAM peers. That is a competitive advantage Brussels is inadvertently handing Apple. gafam.ai will be watching.