Apple announced it will spend $500B in the U.S. over the next four years. The quick math suggests Apple is increasing its annual U.S. expenditures by $39B, up 45% from the run rate outlined in 2021. In reality, the incremental investment is closer to $19B annually. Prior to today’s announcement, I believe Apple was likely on track to increase U.S. investments by $20B annually to support Apple Intelligence.

Where does the estimate that Apple is investing $39B more each year in the U.S. for the next four years come from? In 2021, Apple announced it would invest $430B in the U.S. over the next five years, which implied $86B in annual U.S. investment. Now, the company is set to invest $500B over four years, which implies $125B per year, up from $86B.

The announcement further confirms that Apple recognizes an AI-powered future will require significant infrastructure investments. Of the $19B in incremental spending, I estimate that 15% will go toward the 20,000 new hires. Assuming Apple was previously on track to hire 10,000 people and the average fully loaded cost per hire is $300K, this would add about $3B in incremental annual employee expenses, leaving up to 85% for infrastructure.

Apple is significantly expanding its data center capacity to support Apple Intelligence Cloud, known as Private Cloud Compute. The company is increasing investments in its existing data centers in North Carolina, Iowa, Oregon, Arizona, and Nevada to meet growing AI demand. Additionally, Apple will build a new 250,000-square-foot advanced manufacturing facility in Houston, Texas, set to open in 2026, to produce servers optimized for Apple Intelligence. The company is also doubling its U.S. Advanced Manufacturing Fund to $10B and launching a manufacturing academy in Michigan to train the next generation of U.S. manufacturers.

I believe the announcement effectively eliminates the risk of Apple getting tariffed and channeling those “savings” into U.S. investments. I estimate that the U.S. accounts for about 35% of overall sales (the Americas segment was reported at 42% in Dec-24). That means the U.S. will generate about $147B in revenue this year, with roughly $120B coming from the product revenue segment at risk of tariffs.

Had Apple not increased its U.S. investments—and thus been subject to a 10% tariff, which would have negatively impacted sales or margins by 10%—it implies Apple will “save” $11B a year by avoiding the tariffs. In other words, tariff avoidance effectively pays for 50% of the incremental $19B in U.S. investment announced today.

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