(Nov 5): Apple Inc. is reducing employee budgets for artificial intelligence usage as part of a cost-cutting effort, even as the company seeks to put AI at the center of its operations.

Last month, Apple quietly lowered the daily spending cap for some engineers using AI models to $200 from $300, according to people with knowledge of the change. The company is now planning further cuts for some engineering teams, potentially reducing their daily allowances to as little as $100, said the people, who asked not to be identified because the discussions are private.

The changes underscore the balancing act Apple faces as it tries to rein in costs while encouraging employees to incorporate AI more deeply into their daily work. The company is pushing to modernize its engineering processes and other internal operations with AI, even as it places tighter restrictions on how much employees can spend using the technology.

Many groups outside of engineering already face a $100 daily cap, but Apple has considered reducing that limit to as little as $25 for some teams, the people said. Employees who require higher allowances to perform their jobs will be able to seek exemptions from senior leadership.

A spokesperson for Cupertino, California-based Apple declined to comment.

The budgets cover tokens, the units of text and other data processed by AI models when handling requests. AI providers typically charge based on the volume of tokens consumed, with more advanced models generally costing more. Complex tasks such as writing and debugging software code can consume large quantities of tokens.

The restrictions reflect a broader shift across the technology industry, where companies that initially encouraged widespread experimentation with AI are increasingly scrutinizing the costs. The challenge is determining how much spending can be eliminated without undermining the efficiency gains that prompted companies to embrace the technology in the first place.

Reactions to the changes internally have been mixed. Some employees say that few workers were using their full $300 daily allowances, making the previous limits unnecessarily generous. Others see the reductions as a sign of broader cost cutting, adding to concerns about potential layoffs.

Already, some Apple divisions have hired outside consultants to evaluate their efficiency and operations, fueling employee anxiety about possible restructurings in the future. New Chief Executive Officer John Ternus is pushing the company to run faster and leaner, with fewer management layers, Bloomberg News has reported.

The actual savings from the reductions remain unclear, particularly given that some employees weren't approaching their previous limits. The impact could become more pronounced if Apple proceeds with further cuts, potentially forcing heavier users to seek exemptions to maintain access to the tools they rely on.

At the same time, Apple's overall spending has gone up. The company said this week that research and development expenses increased 32% in fiscal year 2026, driven by higher infrastructure and AI costs. Companywide operating expenses jumped 22% to a total of $75.5 billion, or 16% of total net sales.

Apple employees have access to a range of AI services, including Anthropic PBC's Claude, OpenAI's ChatGPT and Google's Gemini. Some teams are being directed to use less expensive models or to rely on AI models that run locally on devices.

Apple isn't the only company seeking to control AI spending. Microsoft Corp. has also tightened internal AI spending allowances, while Tesla Inc. imposed a $200 weekly limit on employee AI spending. Uber Technologies Inc., meanwhile, capped usage of individual AI coding tools at $1,500 per month. And Meta Platforms Inc. introduced token budgets and encouraged employees to shift toward internally developed AI tools.

Uploaded by Siow Chen Ming