Apple plans to spend $500 billion in the next four years – but how much of that is fresh funding?
Apple has announced plans to invest more than $500 billion in the US over the next four years, marking the tech giant’s largest-ever spending commitment.
The funding will go on a broad mix of projects, including expanding the staff and facilities in Michigan, Texas, California, Arizona, Nevada, Iowa, Oregon, North Carolina, and Washington, as well as on a new factory in Texas.
Apple said it will open the new advanced manufacturing facility in Houston to produce servers that support Apple Intelligence. The 250,000-square-foot server manufacturing facility, set to open next year, is expected to create thousands of jobs.
It will also double its US Advanced Manufacturing Fund from $5 billion to $10 billion, with a particular focus on promoting advanced manufacturing and skills development across the US.
Similarly, a new manufacturing Academy in Detroit will link Apple engineers and experts from universities including Michigan State with small- and medium-sized businesses, advising them on implementing AI and smart manufacturing techniques.
“We are bullish on the future of American innovation, and we’re proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future,” said Apple CEO Tim Cook.
As part of the investment scheme, Apple also plans to expand its research and development funding in areas such as silicon engineering, software development, and AI and machine learning, hiring around 20,000 people.
“From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing,” said Cook.
“And we’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation.”
Apple’s big domestic push – but is it new?
Rory Bathgate
Apple’s investment is all about increasing the amount of its domestic manufacturing, talent, and AI infrastructure. But how much of this is new? No one is sure.
Apple could be doing some creative headline writing here, given it boasted about a $350 billion investment in 2018 and a $430 billion investment in 2021, across overlapping five year timeframes.
The full sum also includes Apple TV spending – which had totaled $20 billion by 2024 per Bloomberg – and supplier spending.
That said, it’s clear that there’s a significant (if unspecific) figure being invested here in a strategic move to secure its supply chain. Since 2020, Apple has been sprinting to produce its own components.
It launched its first M series chips in November of that year, first for MacBooks and eventually across its full lineup of devices, and by 2025 has entirely replaced Intel chips with its in-house hardware.
Meeting this goal has meant heavy reliance on TSMC, particularly its many fabrication plants in Taiwan, where TSMC produces leading hardware including Nvidia’s most advanced GPUs for AI in data centers.
But Taiwan’s precarious geopolitical position with relation to China has for years cast doubt over whether this supply chain is viable in the long term.
The tech giant’s Texas server factory will be needed as Apple looks to expand its Apple Intelligence generative AI feature across its software offerings, given the company’s focus on manufacturing and operating as many of its products and services as possible in-house.
While Apple inked a deal with OpenAI last year, Apple Intelligence relies on in-house LLMs trained by Apple using its own servers and chips. As it looks to improve the sophistication of its on-device AI models, as well as offer users more advanced capabilities via its Private Cloud Compute, it will need to rapidly expand servers for training and inference.
Apple cannot replace TSMC, nor is it seeking to. Its AI servers currently use Apple silicon and the expanded servers made in Texas will run next generation M series chips produced by TSMC, according to a post on X by Ming Kuo, securities analyst at TF International.
But in slowly expanding its domestic manufacturing capabilities, Apple is putting itself in a far more stable supply chain position.
Its commitment to its Detroit manufacturing academy and beefed up research and development funding for silicon engineering and AI could also prove transformative in the long-run as it seeks to empower US workers with the necessary skills to meet chip demand.
TSMC has faced union backlash over the large number of workers from Taiwan employed at its Arizona facility, as reported by Tom’s Guide, with around half of all jobs created at the site so far having gone to Taiwanese workers.
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