Apple to source from US, build giga factory for AI servers in $500 bn pledge
25 Feb 2025
Apple has agreed to compensate the US economy for its overseas production of iPhones and iPads with fresh investments of up to $500 billion, which include a giant factory for artificial intelligence servers in Texas, over the next four years, creating about 20,000 high-paying jobs in research and development.
Apple will also increase sourcing from American suppliers, including cinemas and television shows for Apple TV. The list of US purchases include glasses from Corning and other prominent manufactures of mobile phone components.
Apple has also agreed to set up a giant factory in Texas, in collaboration with Foxconn, for artificial intelligence servers and add about 20,000 research and development jobs across the country in the next four years.
The announcement comes after a meeting of Apple CEO Tim Cook with President Donald Trump. In essence Trump wants Apple to source most of iPhone inputs from the US to avoid high tariffs.
Trump has threatened to impose an additional 10 per cent tax on imports from China, imports. The previous Trump administration had granted some concessions to Apple on its China-made iPhones.
In fact, Trump has been insisting that all American companies should shift their bases back to the United States so as to bring back its manufacturing glory.
“He’s investing hundreds of billions of dollars,” Trump said after the meeting last week. He implied that the iPhone maker is investing locally because it does not want to pay tariffs.
Apple on Monday said the proposed giga factory will be built over a quarter-million-square-foot area in Texas by 2026. The plan includes the setting up of a server manufacturing facility in Houston, a supplier academy in Michigan.
Apple along with partner Foxconn Technology Group will start production of AI servers in Houston later this year. These servers, which will form Apple’s Private Cloud Compute system, will be built entirely in the US.
While Apple had earlier made strategic investments in the US, it has been contract manufacturing most of iPhone and iPad components as also fully built assembled units outside the US, mostly in China and Taiwan.
Notably, it continues to manufacture the Mac Pro in Texas, under an arrangement facilitated during Trump’s previous administration.
