Facing questions on AI strategy, Tim Cook says Apple is ‘very open’ to acquisitions

Facing questions on AI strategy, Tim Cook says Apple is ‘very open’ to acquisitions


Tim Cook arrives for the annual Allen and Co. Sun Valley Media and Technology Conference at the Sun Valley Resort in Sun Valley, Idaho, on July 8, 2025.

David Grogan | CNBC

Apple’s AI strategy and investment was on the mind of analysts on an earnings call after the company reported third-quarter earnings that showed overall revenue grew by 10% year over year.

While Apple was never going to announce major acquisitions or initiatives on an earnings call, CEO Tim Cook’s remarks on Thursday confirm that the company is going to invest more heavily in the technology.

Cook said Apple is going to “significantly” grow the company’s investments in AI. He added that Apple was always looking to buy companies of any size that could help it develop its AI offerings.

“We’re very open to M&A that accelerates our roadmap,” Cook 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.”

Cook said that Apple had acquired “around” seven companies so far this year, although not all of them were focused on AI. While Cook has said in the past that Apple is always evaluating potential acquisitions of all sizes, its largest purchase of all time was Beats Electronics in 2014 for $3 billion.

He made the remarks Thursday as Apple has faced growing pressure from Wall Street to catch up to its Silicon Valley peers, all of whom have dedicated tens of billions of dollars toward the infrastructure necessary to power AI.

Apple has never been the biggest spender on capital expenditures among big tech companies. It only reported $3.46 billion in capital expenditures in the June quarter, up from $2.15 billion in the year ago period. Its expenses this past quarter are the highest they have been since the quarter ending December 2022. If Apple spent as much as it did this quarter for a full year, that would be about $14 billion annually.

That hardly compares to Google projecting $85 billion in capital expenditures for its fiscal 2025 last week, Meta’s estimate of as much as $72 billion in annual capital expenditure spending, and Microsoft’s $30 billion capital expenditures guide for the current quarter.

Spending more

“We are significantly growing our investment. We did during the June quarter. We will again in the September quarter,” Cook said.

He added that Apple was rearranging staff internally to focus more on AI.

“We are also reallocating a fair number of people to focus on on AI features within the company,” Cook said. “We have a great team, and we’re putting all of our energy behind it.”

To be clear, Google and Microsoft run cloud businesses that rent out AI hardware, which Apple doesn’t. And Apple finance chief Kevan Parekh said the company has a “hybrid” model to capital investments, in which it gains access to systems it needs through partners and records them as operating expenses.

Apple also said that some of its capex will pay for servers using its own chips, which it calls Private Cloud Compute — not merchant chips from companies such as Nvidia.

“I would say a significant portion of the driver of growth that you’re seeing now is really driven by some of our AI related investments,” Parekh said.

Cook also downplayed any potential that AI-powered devices that haven’t been invented yet might threaten Apple’s iPhone franchise. Apple’s former design guru Jony Ive teamed up with OpenAI in a $6.5 billion May deal, although they have yet to reveal what their product is, does or will cost.

“It’s difficult to see a world where iPhone’s not living in it,” Cook said, “That doesn’t mean that we are not thinking about other things as well, but I think that that the devices are likely to be complementary devices, not substitution.”

Cook also made it clear to investors and analysts on the call that Apple does have an AI strategy that it’s executing on.

“Our focus, from an AI point of view, is on putting AI features across the platform that are deeply personal, private and seamlessly integrated,” Cook said.

When asked if he thought that if large language models — the core AI technology made by companies such as Anthropic and OpenAI — might be commoditized, Cook declined to answer and said he was keeping some parts of the company’s strategy secret for now.

“The way that we look at AI is that it’s one of the most profound technologies of our lifetime” Cook said. “It will affect all devices in a significant way.”

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