Apple's R&D spend rises as it plays catch-up in AI race

Summary

MacKenzie Sigalos reports on Apple's increased R&D spending, indicating urgency in AI development. The company is still behind peers, appears to be outsourcing AI models, and faces a settlement over overpromised Siri features. A potential acquisition may be on the horizon to close the AI gap.

• Apple's R&D spend has risen to over 10% of revenue, a first in 30 years.
• Spending is growing twice as fast as sales, signaling AI urgency.
• Apple is reportedly adopting a model-agnostic strategy for iOS 27, letting users choose third-party AI models.
• Apple agreed to pay $250 million to settle claims of overpromising AI-powered Siri features.
• The company appears to be outsourcing AI solutions to competitors.
• Apple's CFO hinted at no longer targeting cash net neutrality, possibly signaling an acquisition.
• The on-device AI strategy leverages custom silicon and privacy.
• Upcoming WWDC will be key for Apple's AI roadmap.