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AAPLApple Inc.$356.27
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14 Nov, 02:49
Apple's favorable AI economics and low capex advantage
Bullish0.00%
AI Summary
The author presents a bullish case for Apple, highlighting its favorable net cash flow from Google for AI services and minimal capital expenditure compared to competitors, suggesting a sustainable competitive advantage if AI models become commodities.
Apple reportedly pays Google about $1B a year for a custom Gemini so Siri finally works. Google is spending well over $150B this year building Gemini, and it still pays Apple roughly $20B a year to stay the default search engine on the iPhone, which leaves Apple about $19B a year ahead with its own AI supplier. Apple's capex is still a rounding error while everyone else borrows to buy GPUs. If models turn into a commodity, I don't see why Tim Cook's successor would ever pay to build one.