Good morning. Apple’s CEO Tim Cook is planning to spend big on American innovation.
The tech giant announced on Monday an investment of $500 billion in the U.S. over the next four years which will include projects such as a new server manufacturing facility in Houston slated to open in 2026 and a supplier academy in Michigan. Apple said it expected to hire about 20,000 workers during that time.
The company has made similar announcements in the past, including during President Donald Trump’s first term in 2018, in which he ultimately decided that the iPhone would be exempted from a list of tariffed goods. Also in 2021, under former President Biden, Apple said it would spend $430 billion over five years and hire 20,000 people.
Despite these initiatives, Apple currently builds the vast majority of iPhones and other products in China, where tariffs went into effect earlier this month. Monday’s investment announcement is Apple’s largest-ever spending commitment in the U.S. to date and suggests a more concerted push to change its manufacturing strategy—and win political concessions.
"I would not be surprised if Apple's announcement about accelerating investment in the U.S. and hiring 20,000 U.S. employees is part of a deal to make the company exempt from the tariffs on goods imported from China," Peter Cohan, associate professor of management practice at Babson College told me.
Apple’s $500 billion figure likely includes "spending on R&D, data centers, the new manufacturing facility in Houston, supporting the supply chain, training, and original content, such as movies and shows for Apple TV+ service," Wamsi Mohan, research analyst at Bank of America, wrote in a note on Monday. Mohan added that investment in “most of these categories was likely already on the roadmap for spending, however, Apple might have shifted part of the spending to the U.S.” Bank of America analysts do not expect a change to capital return plans, he said.
‘Hiring the right talent’
CFOs say finding the right tech talent is more important than ever. And research finds three of the top 10 biggest near-term risks for executives and board members revolve around labor and talent.
Apple plans to hire around 20,000 people who will be focused mostly on R&D, silicon engineering, software development, and AI and machine learning, the company said.
“Competition for AI skills and expertise continues to ramp up,” said Tim Herbert, chief research officer at CompTIA Inc., a global IT training and certification vendor. “As companies across every sector of the economy pursue the talent to support their AI initiatives, inevitably there will be shortages, or, at a minimum, lengthier or more challenging recruiting efforts.” A CompTIA analysis of job posting data from Lightcast finds the volume of employer recruiting for dedicated AI roles, such as an AI engineer, approximately doubled year-over-year, Herbert said.
The AI spending race is on among Big Tech companies that will need top talent, like Meta which is speeding up the hiring process for machine learning engineers.
Meanwhile, Cohan agreed that Apple will have to compete for talent. “So far Apple's AI, such as Apple Intelligence, has been underwhelming, but they could change that by hiring the right talent and managing the process more effectively,” he said.
Cohan also added: "It may be that the pressure to hire so many talented people will convince the president to allow more H-1B visas so the talent can move to the U.S."
