Apple has announced plans to invest $500 billion into the United States over the next four years, including the opening of an AI server factory in Texas. The tech giant aims to create 20,000 jobs as part of this extensive investment.

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Apple has announced plans to invest $500 billion into the United States over the next four years, including the opening of an AI server factory in Texas. The tech giant aims to create 20,000 jobs as part of this extensive investment. The announcement follows a recent meeting between Apple's CEO Tim Cook and President Trump, who has suggested that the investment aims to bypass tariffs. 

However, there are questions regarding the authenticity of this investment, as some analysts believe it may be a rehash of previous commitments. Notably, UBS has criticized the announcement, suggesting it may lack substance based on Apple's historical investment patterns. There are concerns that this move may be more political than it is transformational for Apple's infrastructure strategy.

Despite the staggering sum of $500 billion, Apple's investment strategy differs from its counterparts like Meta, Microsoft, and Amazon, which are known to invest heavily in infrastructure. This is because Apple focuses on edge AI, utilizing its own silicon rather than competing in the data center market. Some industry figures have expressed doubt over whether the move will lead to a significant change in Apple's capital allocation strategy.



Apple's plan to invest $500 billion in the U.S.

Let's keep the eye on Apple if we can, of course, talking about Berkshire there, which had been the largest. Well, certain skills is a very large holder. The tech giant is planning to open an AI server factory in Texas. This is part of the announcement, at least, of a massive investment in the U.S. Deirdre Bosa joins us. She's in San Francisco. Has more for us on exactly what's behind this plan. Deirdre. Hey, good morning, David. So let me give you a few more details. Investment of half a trillion dollars over the next four years, pledging 20,000 jobs, and that comes less than a week after Tim Cook met with President Trump. Now, Trump was quick to front-run the announcement at a press conference last week on Friday, saying that Apple was going to build here instead because they don't want to pay the tariff. So really drawing a line there. And again, today on Truth Social, the president posting, the reason, faith in what we are doing, without which they wouldn't be investing 10 cents, which is where it certainly becomes a little muddy. Apple has long been touting investment here in the United States. Here's a press release from 2021 during the Biden administration, where Apple pledges $430 million in U.S. investments over five years and exactly 20,000 jobs. And then back in 2018, similar commitment for $350 billion, raising the question, how much of the latest announcement is new? How much is it a repackaging of previous commitments? UBS pour some cold water on the idea of this being new, writing in a note this morning, while the headline figure on the surface is a large number, we believe it lacks substance at this juncture based on history. It also points out that Apple's infrastructure strategy is very different than that of the hyperscalers. Apple spends a lot less. It estimates $10 billion versus roughly $200 billion for Meta, Microsoft and Amazon and Google in 2024. And that in turn has to do with Apple's AI strategy, which has always been very light on infrastructure and focuses on on-device AI or edge AI, leveraging its own silicon and leveraging the large language models that others like open AI have built. Now, all of this, guys, would seem to suggest that the announcement this morning, more political than groundbreaking and really a continuation of the Apple playbook from that first Trump administration. Let the president take credit to avoid tariffs on key parts of the business, like iPhone manufacturing. Yeah. You know, not dissimilar, Deirdre, in some ways from something else you've covered closely, the Stargate announcement, for example, pitched as though it was all done up in a week or two when in fact, obviously, the plans had been in place for many months. But the announcement obviously tied in part and it was an enormous announcement not to not to diminish it at half a trillion dollars over the next whatever it may be, five years in terms of data centers on this one. UBS makes the point, obviously, you mentioned it. I mean, Apple spends so much less on capex as a percentage overall revenues than do Amazon or Alphabet or Meta. And they seem to indicate that if they were really to move up, the buyback might be in question as well. Right. Right. They would have to sort of reallocate capital and I mean, really enter a game that they haven't been in. Right. That they would be starting on the back foot. However, you could argue that new trends in artificial intelligence like distillation could allow them to catch up faster. But again, this would be a very big shift. And I did find the data center piece of this very interesting and new potentially. What would they do with that space? But I mean, we know that Apple hosts a lot of cloud computing even for its own users. That could be one reason. David, I'm glad you pointed out Project Stargate. It really sort of tells you how difficult it is to track these things. Has Apple added 20,000 jobs since that pledge in 2021 and again in 2018? It's hard to track that. I mean, you can look at their own workforce. But, you know, something like Masasan has done, he can say, well, we invested in all these startups that created jobs. So, you know, it's nuanced and it's difficult to judge. But we'll see what other details come out there. Do they get any tariff relief? Don't they still have to pay the higher tariffs with the iPhones made in China? It's a great point. And this is this would all arguably be to avoid those tariffs. We'll see if that actually works. OK, Deirdre. Thank you.

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