Apple reduces employees' daily budget for AI tool usage

Tech giant Apple has taken a significant decision to reduce the daily budget of its AI employees to curb the heavy expenditure being incurred on Artificial Intelligence (AI). According to a report by Sandesh (Business), the company has modified the daily expense limit for employees using AI tools. Previously, engineers were receiving a daily budget of up to $300 (approximately ₹25,000) for these tools, which has now been reduced to a maximum of $200 (approximately ₹16,500). Additionally, Apple is also considering cuts in the expenses of its non-engineering teams.

The company has taken this step to maintain profitability and to evaluate the actual benefits being derived against the expenditure on AI. The company is now focusing on cost control instead of encouraging indiscriminate AI usage. If any employee requires a budget exceeding the prescribed daily limit for their project, they will have to contact their senior officials for additional approval.

On the other hand, Apple is warning regarding an 'unprecedented' increase in memory chip prices. According to a report by The Guardian, there is a struggle for the supply of memory chips due to the increasing demand from AI data centres, which could impact profit margins. Apple's new Chief Executive Officer (CEO) John Turner stated during a conference call on Monday that memory costs are likely to be higher in the fourth quarter of this year than in the previous three months. To mitigate this impact, the company had increased the prices of iPad and MacBook in June, as well as iPhone in September.

Regarding financial results, Apple earned $30.71 billion (or $2.10 per share) during the July-September period, which is 12% higher than the $27.47 billion (per share $1.85) in the same period last year. The company's total revenue increased from $102.5 billion to $114.5 billion. This revenue includes five cents per share through tariff refunds. Statistically, the 12% increase in revenue is due to strong demand for iPhone sales and Mac Mini, with strong growth also observed in China. However, results for iPad and wearables were disappointing, and the services sector grew at a rate of 10%, which is lower than the group average.

Analyst Jacob Borne stated that Apple's 'tepid' approach towards AI infrastructure costs has helped it maintain cash flow. By partnering with companies like Alphabet, Apple can strengthen its AI capabilities without taking the same financial risks as other competitors. Meanwhile, Apple's shares fell 2.75% in after-hours trading on Wall Street. There is significant interest in the market towards the iPhone Duo, which could assist in upcoming product innovation.

In a separate development, according to The Times of India, OpenAI and Anthropic have instructed their employees to hide company logos and identification (badges). These security measures have been taken due to increasing hostility towards AI employees and fears of espionage. Concerns regarding employee security have risen due to attacks on executives and attempts to obtain confidential information.

Apple was an American multinational technology company, known for devices such as iPhone, iPad, and MacBook, as well as various software services.