Hajra Naz
Massive Investment in AI and R&D
Over the next four years, Apple plans to invest $500 billion in the US, the company said Monday. This investment includes the establishment of a sizable artificial intelligence (AI) server factory in Texas as well as the employment of some 20,000 research and development positions nationwide.
Breakdown of the $500 Billion Investment
The pledged investment covers a wide range of initiatives, including:
- Purchases from US suppliers
- Domestic production of television shows and movies for Apple TV+
- Expansion of research and development efforts
However, Apple did not specify how much of this amount was already planned for its US supply chain, which includes companies like Corning, the manufacturer of iPhone glass in Kentucky.
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Political Implications and Trade Concerns
This news comes after rumors circulated that former President Donald Trump and Apple CEO Tim Cook had met. Although Apple had previously obtained exceptions for select products, the Trump administration has placed 10% tariffs on many Apple devices made in China.
According to D.A. Davidson analyst Gil Luria, this investment might be a calculated step to support the Trump administration. Additionally, he questioned whether this spending is a rebranding of current expenditures or a true increase in investment.
Apple’s History of US Investment Commitments
Apple made a similar announcement in 2018 during Trump’s first term, pledging $350 billion in contributions to the US economy over five years. The latest commitment suggests an expansion of that initiative.
Despite the announcement, Apple’s stock saw a slight decline of 0.8% in pre-market trading. Trump later responded via Truth Social, thanking Apple and Tim Cook for their confidence in his administration.
Apple’s Manufacturing Footprint in the US
A few essential parts, such as semiconductors made by Broadcom, Skyworks Solutions, and Qorvo, are made in the US, even if the majority of Apple’s consumer goods are put together abroad.
Taiwan Semiconductor Manufacturing Co. (TSMC) owns a factory in Arizona where Apple started mass producing its silicon chips last month. Two of Trump’s major industrial policy initiatives during his presidency were bringing TSMC to Arizona and passing the CHIPS Act.
Apple and Foxconn to Build New AI Server Factory in Texas
Apple also partnered with Foxconn (Hon Hai Precision Industry) to construct a 250,000-square-foot facility in Houston. This factory will assemble servers used in Apple Intelligence, the company’s AI-powered suite designed to assist with tasks like drafting emails. Currently, these servers are manufactured outside the US.
Read More: Apple Partners with Alibaba to Launch AI in China
Expansion of Advanced Manufacturing Initiatives
Apple plans to double the amount of its Advanced Manufacturing Fund from $5 billion to $10 billion. This development incorporates a multibillion-dollar investment in advanced silicon production at TSMC’s office in Arizona.
Apple has not disclosed the details of its agreement with TSMC, despite having previously used the fund to help partners construct the infrastructure required for Apple-related goods and services.
New Manufacturing Academy in Michigan
In addition to these efforts, Apple will launch a manufacturing academy in Michigan. This facility will provide free training courses for small and mid-sized manufacturing businesses, covering topics such as project management and process optimization. Apple engineers and university faculty members will lead the training programs.
