In addition to naming Ternus as CEO, Apple also made a significant internal promotion that may be just as important in shaping the company’s future direction. Srouji, who has been leading Apple’s custom silicon development, will now oversee hardware operations.

As Apple has gradually transitioned to designing its own chips across its product lineup — including iPhones, Macs, and AirPods — the leadership combination of Ternus and Srouji is seen as highly complementary. In a 2023 interview, the two executives emphasized that this long-term strategy allows Apple to tightly integrate hardware and software, enabling highly optimized features while avoiding unnecessary computing overhead.

A deeper look at Apple’s capital expenditure strategy reveals a distinct philosophy under CEO Tim Cook. Unlike its Silicon Valley peers, Apple has focused on supply chain efficiency and high-margin services — such as AppleCare, iCloud, and App Store revenue — to deliver returns to shareholders.

So far, Apple’s AI strategy has largely centered on avoiding massive capital spending. In contrast, companies like Microsoft, Google, Amazon, and Meta collectively invest hundreds of billions of dollars annually in building data centers and acquiring high-cost AI chips.

In developing foundational AI models, Apple has also taken a different path — choosing not to aggressively build its own large-scale models, instead relying on Google’s Gemini to support its cloud-based AI features.

As AI applications become more integrated into devices, Apple has accelerated its efforts to design more types of chips internally, reducing reliance on suppliers such as Intel, Qualcomm, and Broadcom.

One of the most significant strategic moves under Cook has been the gradual reshoring of manufacturing to the United States. Apple has expanded its chip capabilities through major investments, including support for TSMC’s Arizona fabrication plant and Texas Instruments’ new U.S. facilities.

As part of a broader $600 billion U.S. investment plan through 2029, Apple announced last August that it aims to lead the development of a fully integrated domestic semiconductor supply chain.

The company’s goal is to position Apple silicon as the best platform for running AI software, ensuring that developers consistently view Apple chips as the optimal environment for AI workloads.

Apple’s key in-house chips include the M-series processors for Macs and the A-series chips for iPhones. Both are system-on-chip (SoC) designs.

The latest A19 and M5 chips, released in 2025, feature integrated neural engines designed to run AI applications directly on-device, highlighting Apple’s focus on edge AI rather than cloud-heavy approaches.

Market Interpretation

Despite its growing in-house capabilities, Apple will continue to rely on external suppliers for many components. It licenses core processor architecture from Arm and sources technologies from companies such as Broadcom and Qualcomm. It also depends on Samsung for memory and Texas Instruments for analog chips.

Overall, Apple’s evolving chip strategy reflects a hybrid approach — combining vertical integration in critical areas with selective reliance on partners — as it positions itself in the global AI competition.