Apple blends on-device privacy with a hybrid AI model, combining its own neural engines and Private Cloud Compute while relying on Google Gemini via a multi-year partnership to power Apple Foundation Models and enhance Siri.

Apple’s AI investment remains comparatively modest, about $2–4 billion annually since 2020, far below rivals investing heavily in AI infrastructure and data centers.

External AI infrastructure is a key bet for Apple, with Google’s Gemini powering a revamped Siri later this year, and reports suggesting the deal could be around $1 billion annually.

AI-fee revenue is heavily driven by ChatGPT, which reported roughly 900 million weekly active users.

Grok by Elon Musk is a notable second-largest contributor, accounting for about 5% of AI-revenue.

Apple’s fiscal year 2025 revenue reached $416 billion, with about 850 million average weekly App Store users worldwide.

Apple’s services segment, including AI-related revenue, accounts for about a quarter of total revenue and enjoys gross margins above 70%, growing faster than hardware.

Apple monetizes AI through App Store first-year fees on generative AI apps (about 30%, then 15%), with 2025 AI app fees near $900 million and a peak monthly AI app revenue of $101 million in August 2025.

Revenue data from AppMagic, corroborated by The Wall Street Journal, shows strong momentum for AI-enabled apps in the iOS ecosystem.

Analysts project about $1 billion in generative AI app revenue for 2026.

Some view Apple’s late-market entry as a risk if Siri’s improvements don’t materialize to deliver the anticipated AI app revenue benefits.

The Campo Siri overhaul, powered by a Gemini variant, aims for a context-aware assistant across iOS 26.x with a full chat-style rollout targeted for iOS 27 and macOS 27, though some features may slip to later releases.