Apple AI budget cuts began in October, when the daily spending cap for some engineers dropped to $200 from $300, according to people familiar with the change. Apple is now planning further cuts for some engineering teams that could bring the cap as low as $100 a day.
Mark Gurman reported the changes in a Bloomberg exclusive, and Apple declined to comment. They come as John Ternus, who became CEO on September 1, pushes a faster and leaner company that has already made cost cuts across teams.
Apple AI budget cuts may reach $100 a day for engineers
Apple lowered the engineering cap quietly. Many groups outside engineering already face a $100 daily cap, and Apple has considered cutting that to as little as $25 for some teams. Employees who need more can ask senior leadership for an exemption, which heavy users would have to do at a $100 cap.
The budgets cover tokens, the units of text and data that AI models process for each request. Providers charge by token volume and more advanced models cost more, so tasks such as writing and debugging code use a lot of them.
Apple employees can use AI services including Anthropic’s Claude, OpenAI’s ChatGPT and Google’s Gemini. Some teams are being told to use cheaper models or models that run locally on devices.
Reaction inside Apple is mixed. Some employees say few people came near the $300 allowance, so the old limit was generous and the actual savings are unclear. Others read the cuts as part of wider cost cutting, which adds to worries about job cuts in Siri and Vision Pro. Some divisions have also hired outside consultants to review their efficiency and operations.
Apple is spending more on AI overall while it caps usage
Apple set a revenue record of $478.8 billion in fiscal 2026 earnings, up 15%, but its costs grew faster. Research and development expense rose 32% to $45.8 billion, mainly from higher infrastructure costs, including AI investment, and headcount.
Total operating expenses rose 22% to $75.5 billion, or 16% of net sales, up from 15% a year earlier. Apple had about 167,000 full-time equivalent employees on September 26. Other large companies have put limits on AI spending too:
- Microsoft has tightened its internal AI spending allowances.
- Tesla set a $200 weekly limit on employee AI spending.
- Uber capped individual AI coding tools at $1,500 per month.
- Meta introduced token budgets and encouraged employees to shift toward internally developed AI tools.
The caps will save Apple little by themselves. The bigger saving would come from moving teams to cheaper and on-device models, which Apple is already asking some of them to do.
