Apple faces $1.1 billion tariff hit this quarter; Tim Cook bets on AI to offset impact

Apple CEO Tim Cook said the company will take a $1.1 billion hit this quarter due to Trump-era tariffs, even as App Store revenue surged in double digits last quarter despite regulatory pressure from the European Union and other global authorities.

Following the earnings call, Cook addressed employees at an internal gathering, outlining Apple’s expanding artificial intelligence (AI) strategy, according to a Bloomberg report. “We’ve rarely been first. But Apple invented the modern versions of existing product categories. This is how I feel about AI,” Cook told employees, urging them to integrate AI into their daily work and focus on building AI-powered products.

He added that Apple is investing in AI “in a big way,” noting that 40% of the company’s 12,000 new hires last year joined R&D roles.


Chips, Siri, and AI infrastructure

Cook highlighted Apple’s in-house chip development efforts, including a cloud computing chip codenamed ‘Baltra’ and plans to establish a new AI server manufacturing facility in Houston.

Craig Federighi, Apple’s SVP of Software Engineering, joined the meeting to discuss progress on the Siri voice assistant. The revamp of Siri—part of the broader Apple Intelligence initiative—has been delayed due to leadership changes within the company’s AI division, the report said.

Cook also shared that Apple will launch new stores in India, the UAE, and China this year, and is preparing to open its first retail outlet in Saudi Arabia in 2026.