Apple's AI Capex Accounting Shift to Boost EPS

Data from Zhitong: Apple's capex accounts for less than 5% of revenue, while several peers have already reached 20-30% of revenue. This has sparked another round of claims that "Apple is lying flat on AI." But this comparison itself is flawed. A significant portion of Apple's computing power is rented externally; the cost is expensed immediately and hits the income statement in the same quarter. Others buy their own chips, classifying it as capex, which is amortized over six years. For the same amount spent on AI, Apple's gross margin takes a hit on its books, whereas competitors' EPS looks better. So I guess Apple will eventually switch from renting to buying. Not because it suddenly understands AI, but simply because the math is too obvious now—shifting the same expenditure to a different account line item mechanically boosts EPS.