While big tech burns cash on AI, Apple waits

Google will spend approximately $90 billion on AI infrastructure this year. Meta has committed $65 billion. Microsoft, Amazon, and Alphabet are collectively spending over $300 billion. Apple, meanwhile, is spending just $12.7 billion on capital expenditure for the entire fiscal year. The conventional narrative is that Apple is losing the AI race. But what if Apple has decided not to run in that race at all?

The evidence for Apple’s apparent failure is easy to assemble. Siri remains a punchline. The promised AI-powered assistant has been delayed until 2026. Analysts have called the company’s AI strategy a “disaster” and warned it is one to two years behind competitors. Meanwhile, Apple sits on more than $130 billion in cash, watching others burn through capital at unprecedented rates.

But consider an alternative reading. The foundation model market is beginning to exhibit classic signs of commoditisation. When one company introduces agentic capabilities, the others follow within months. Benchmark leadership changes constantly, with no provider establishing a durable lead. Prices are collapsing: Anthropic recently cut prices by 67%, Google has slashed rates by 70%-80%, and OpenAI has repeatedly reduced costs on successive models. This is textbook commodity market behaviour.

If foundation models are heading toward commodity status, then the strategic value shifts to whoever controls the integration layer and the user relationship. Apple has 2.4 billion active devices. It has the most valuable distribution channel in technology. And its recent moves suggest a deliberate strategy: rather than building frontier models, source them from whoever is best at any given moment.

This is precisely what Apple has done. It partnered with OpenAI in 2024, then switched to Google’s Gemini to power the next generation of Siri. The company is not building the engine; it is curating the best available engine at any given moment, wrapping it in Apple’s privacy architecture, and integrating it across the ecosystem. Own the experience, outsource the commodity.

This pattern will be familiar to anyone who has watched Apple before. Portable MP3 players existed since 1998 — three years before the iPod. Samsung and Sony had smartwatches years before Apple entered in 2015. Bragi shipped true wireless earbuds in 2014, two years before AirPods. BlackBerry, Palm, and Nokia dominated smartphones before the iPhone redefined the category in 2007. In each case, Apple let others absorb the costs of pioneering, watched what worked, and entered with superior integration. The pattern suggests a company that views first-mover advantage as overrated and timing discipline as underrated.