Apple and the bullish AI investment trend
The iPhone maker’s plans have been in the works for a while, but they speak to a larger trend in spending on technology internationally and in the U.S.
The first quarter of 2025 has seen a slew of big AI investments, indicating an unabated fast pace of development and interest in the technology.
The latest surge in AI spending came on Feb. 25, when Apple revealed plans to open a new factory for AI servers in Texas as part of a $500 billion investment in the U.S. The tech giant also plans to hire 20,000 new employees across the U.S.
Apple's revealed its move to investing U.S. AI infrastructure days after CEO Tim Cook sat down with President Donald Trump and a month after ChatGPT creator OpenAI revealed a new data center-based U.S. infrastructure project called Stargate. The investments point to a more significant trend within the AI landscape.
Some confusion
Like with OpenAI and Stargate, some see Apple as trying to garner favor with the new administration. A new executive order by Trump imposed 10% tariffs on Chinese goods, which will hurt Apple because the consumer tech giant builds so many of its devices in China or uses parts made in China for its products. By unveiling plans to invest here, Apple is aligning with one of Trump’s biggest economic goals.
At the same time, it's unclear whether the $500 billion investment and the goal of hiring more workers have long been part of Apple's plans or are new.
"It is not clear how much of this is new or incremental spend," said Futurum Group analyst Nick Patience.
In 2021, Apple promised to invest $430 billion domestically over five years. In 2018 it committed to $350 billion over four to five years.
"This tells us that a considerable amount of the $500 billion -- like the $430 billion before it -- is neither new nor is it an investment," said Alex Harrowell, an analyst with Omdia, a division of Informa TechTarget.
Moreover, not all of the $500 billion will go toward AI technology, noted Chirag Shah, a professor at the University of Washington.
The $500 billion commitment will include work with Apple Intelligence Infrastructure and data centers, corporate facilities and Apple TV+ production in 20 states, according to Apple.
"Who knows how much of this would be media production and how much of this is they were going to help span in their data centers," Shah said. "Some of them will be manufacturing, but not all, and certainly not all in AI."
The AI investing trend
Despite some confusion around what Apple is doing with its investment, this development highlights the more significant trend of large amounts of money being thrown at AI systems.
"There's a huge amount of CapEx investment in AI," Patience, of the Futurum Group, said, referring to capital expenditures.
The investments don’t only involve U.S. vendors.
Chinese cloud provider Alibaba revealed on Monday that it plans to invest 380 billion yuan, or $52.55 billion, in its cloud computing and AI infrastructure over the next three years. Alibaba said the investment is more than it has spent on AI and cloud computing over the past decade.
"All these companies are making big bets in a sense; they're all betting on the same thing essentially," Patience said. "They could all be right, or they could all be wrong, but that'll be a hell of a lot of people to be completely wrong and a hell of a lot of money to be spent."
AI startups
The ramp-up in AI investment is also evident in the startup landscape. AI startups raised $10.4 billion during the first quarter of 2025, according to a new report by Altindex.com.
For example, AI cloud startup Together AI raised $305 million in series B funding this month. The startup will use the investment to further its goal of being the preferred AI cloud for training with open source and custom models, it said.
Lambda, a GPU cloud startup, also raised $480 million in a series D funding round co-led by Andra Capital and SGW, with participation from investors including Fincadia Advisors and Nvidia.
"The rounds these companies are raising are incredibly large," Patience said. "That obviously does imply that those investors believe they're going to get a return for their money."
For Lambda, the investment that the AI startup has seen in the past couple of years has grown since the popularization of ChatGPT.
"It became clear that this new type of technology was going to revolutionize the entire global economy," said Jake Hansen, head of capital markets and business development at Lambda.
However, while Lambda expects more investment in its technology, it doesn't plan to rely on that investment; rather, according to the vendor, it intends to be a cash-generating and self-sustaining business.
"While we're at our stage relatively small, we can continue to grow and capture market share by investing, regardless of how much the hyperscalers are investing over a period of time," Peter Seibold, Lambda's CFO said.
Apple's revenue-generating strategy
Making profits is essential for AI startups like Lambda to stay in the AI race, but it's just as critical for tech giants like Apple.
Apple has a reputation for being behind in AI. While its investment strategy lags behind Microsoft and Google, it might still emerge as a winner.
"They understand that they have something nobody else has," Shouvik Paul, COO at Copyleaks, vendor of an AI-based text analysis platform., said. Apple’s iPhone, the world’s most popular smartphone, has been the main platform for Apple’s generative AI strategy.
"What they can do with that is to layer in AI that can simplify our lives. There's no argument there,” he added..
With the iPhone as its AI platform, Apple will no doubt surge forward, Shah said.
"As long as they maintain that they're not going to be behind because all others will have to go through them,” he said.
Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems
