Apple (AAPL.US) CEO Tim Cook stated on Thursday that the company is prepared to increase its investments to catch up with competitors in the artificial intelligence field, either by building more data centers or acquiring larger companies in the sector, marking a departure from the company's traditionally conservative fiscal policies.

The iPhone manufacturer has struggled to keep pace with competitors like Microsoft (MSFT.US) and Alphabet's Google (GOOGL.US), both of which have already attracted hundreds of millions of users to their AI-powered chatbots and assistants. This growth has also reflected the surge in AI investment spending, with Alphabet raising its 2025 capital expenditure forecast by $10 billion to $85 billion, while Microsoft is expected to invest over $120 billion in the new fiscal year, primarily for data center construction.

Meanwhile, other tech giants are also accelerating their AI investments. Amazon's capital expenditure reached a record $31.4 billion this quarter, up approximately 90% from the same period last year; CFO Brian Olsavsky indicated that this spending level "roughly represents" the company's planned investment for the second half of the year. Meta (META.US) stated on Wednesday that its capital expenditure for this year will range between $66 billion and $72 billion, higher than its previous minimum estimate of $64 billion.

In contrast, Apple has relied on external data center providers to handle part of its cloud computing business. Despite a high-profile partnership with ChatGPT developer OpenAI to support certain iPhone features, Apple continues to attempt developing most of its AI technology internally, including improvements to its Siri virtual assistant.

However, the results have been unsatisfactory. In June, Apple held its annual Worldwide Developers Conference (WWDC), where the company's AI announcements failed to satisfy investors, and Apple delayed the launch of its AI-enhanced version of virtual assistant Siri until next year.

During the earnings call following Apple's third fiscal quarter results, analysts noted Apple's historical reluctance to make large-scale deals and asked whether it would adopt a different strategy in pursuing AI objectives. Cook responded that the company had already acquired seven smaller companies this year and remained open to acquiring larger companies.

"We are willing to pursue M&A deals that help advance our development roadmap," Cook stated. Apple had approximately $133 billion in cash reserves at the end of the quarter ending in June.

Apple tends to acquire small companies with highly specialized technical teams to develop specific products. Its largest deal to date was the $3 billion acquisition of Beats Electronics in 2014, followed by the $1 billion acquisition of a modem chip business from Intel (INTC.US).

But Apple now finds itself at a unique crossroads in its business development. First, regulators worldwide are proposing adjustments to Apple's App Store policies that could reduce revenue from software and subscription services. Additionally, the U.S. Department of Justice is likely to seek to overturn an agreement with Google that makes Google the default search engine on Apple phones—an arrangement that generates approximately $20 billion in annual revenue for Apple.

Meanwhile, startups like Perplexity are negotiating with phone manufacturers to replace Google with an AI-powered browser capable of handling many search functions. Apple executives have stated in court that they are considering using AI search capabilities to reshape the company's Safari browser, with reports indicating that Apple executives have discussed acquiring Perplexity.

Beyond partnerships, Apple also faces challenges from Alphabet in the software realm, as the latter rapidly integrates AI features into its competing Android operating system.

Apple also stated on Thursday that it plans to increase investments in data centers. In this area, Apple typically invests only several billion dollars annually. Currently, Apple is using its own chip designs to handle AI requests, with privacy controls that are compatible with privacy settings on Apple devices.

Apple CFO Luca Maestri did not provide specific spending targets but indicated that total expenditure would increase. "This won't be exponential growth, but it will indeed be substantial growth. Much of this is due to our investments in the AI field," Maestri stated during the conference call.

Apple's stock has fallen 17% in 2025, with investors concerned about slowing hardware sales and believing that Apple has been slow to integrate AI features into its products while also lagging behind other tech giants in investment.