CEO Tim Cook attributes increased R&D spending to generative artificial intelligence work
Apple’s CEO Tim Cook revealed the company’s significant investment in artificial intelligence (AI) while announcing its third consecutive quarter of declining revenues, marking its most prolonged sales slump since 2016. Sales for the fiscal third quarter ending 1 July decreased by 1.4% to $81.8bn, with a higher-than-expected profit of $19.9bn.
Although iPhone sales slightly missed analyst estimates, strong sales in the services segment, including Apple TV+, and an 8% year-over-year growth in China helped compensate for it. Following the announcement, Apple shares remained unchanged during extended trading.
Apple CEO Tim Cook informed Reuters that the increased R&D spending was partly driven by advancements in generative artificial intelligence, a field also seeing substantial investments from technology giants like Alphabet and Microsoft.
“We’ve been conducting research in various AI technologies, including generative AI, for several years. Our commitment to investment, innovation, and responsible product advancement with these technologies remains strong to enhance people’s lives,” Cook stated. “Clearly, our substantial investments are reflected in the R&D spending you see.”
Apple’s research and development spending has reached $22.61 billion for the current fiscal year, approximately $3.12 billion higher than the previous year at this point.
This news coincided with Amazon reporting results that surpassed Wall Street’s expectations.
Amazon’s second-quarter revenue growth accelerated, with sales rising by 11% to $134.4 billion, surpassing analysts’ estimated $131.5 billion from Refinitiv. The company also reported a quarterly profit of $6.7 billion, nearly double the analysts’ expectations.
Additionally, Amazon anticipates a further increase in revenue during the summer. The company highlighted that last month’s Prime Day, which was part of a marketing campaign targeting loyal shoppers, resulted in its biggest sales day ever.
