Tim Cook says Apple is 'very open' to AI acquisitions

Apple's AI strategy has been on everyone's mind lately. I've been following the recent earnings call where Tim Cook faced questions about the company's approach to artificial intelligence. And honestly, it's about time.

During Thursday's call, Cook made it pretty clear - Apple is ready to spend more on AI. Like, a lot more. "We're very open to M&A that accelerates our roadmap," he said. "We are are not stuck on a certain size company, although the ones that we have acquired thus far this year are small in nature."

So far, they've bought around seven companies this year. Not all AI-focused, but still. That's a start, right?

What struck me was Cook's comment about Apple's AI investment plans. "We are significantly growing our investment. We did during the June quarter. We will again in the September quarter," he stated. They're even shuffling staff around internally to focus more on AI features. Smart move.

But here's the thing. Apple's capital expenditures are tiny compared to their Silicon Valley neighbors. They reported just $3.46 billion in the June quarter. Do the math and that's about $14 billion annually. Google ? They're projecting a whopping $85 billion for fiscal 2025. Meta 's looking at up to $72 billion, and Microsoft 's guiding for $30 billion this quarter alone.

Why such a difference? Well, Apple's finance chief Kevan Parekh mentioned they use a "hybrid" model for capital investments. They partner with others for some systems and record those as operating expenses. Plus, they're using their own chips for some servers - what they call Private Cloud Compute - instead of buying from Nvidia .

Cook seems pretty confident about Apple's AI roadmap. "Our focus, from an AI point of view, is on putting AI features across the platform that are deeply personal, private and seamlessly integrated," he explained.

What about those rumors that new AI devices might threaten the iPhone ? Cook's not worried. "It's difficult to see a world where iPhone's not living in it," he said. He thinks any new AI-powered gadgets would complement Apple's ecosystem, not replace it.

When asked if large language models might become commoditized, Cook dodged the question. Keeping some cards close to his chest, I guess. But he did share this thought: "The way that we look at AI is that it's one of the most profound technologies of our lifetime. It will affect all devices in a significant way."

I'm curious to see how Apple's AI acquisitions strategy plays out. Will they stick with small purchases or go big? Either way, Wall Street's watching closely as Apple tries to catch up with its tech rivals in the AI race.