Apple AI Updates: November 3, 2026

1. Apple Will Cap Siri AI’s Server-Side Usage and Sell Expanded Access, and Is Booking Its Cloud Costs Against Margins

Apple reported fiscal fourth-quarter revenue of $114.5 billion, up 12% year over year, on John Ternus’s first earnings call as CEO, and the call added detail on how Siri AI will be run and paid for. Ternus said features that rely on server-side models, including Siri AI and intelligent photo editing, will have usage limits, and that users who need more capacity will be able to buy expanded access in the future as part of iCloud+. CFO Kevan Parekh said Siri AI’s cloud inference costs will be recognized in services cost of sales, that Apple will defer a portion of hardware revenue to cover Siri AI as a bundled service (as it already does for Maps, Siri, and iCloud), and that December-quarter gross margin guidance of 45% to 46% reflects higher memory costs plus some costs from the Siri AI ramp. Asked how Siri AI usage splits between on-device processing, Private Cloud Compute, and Google Cloud, Parekh said it is too early to predict the on-device versus Private Cloud Compute mix or any further compute needs, and Apple gave no Siri AI user or request figures beyond Ternus’s statement that Siri handles more than 2.5 billion requests a day. Ternus described Siri AI as request-based today but built on an orchestrator-driven architecture with room to add agentic capabilities, and December-quarter operating expenses are guided to grow 11% to 13% year over year, driven by R&D and in particular AI. Parekh also said Apple sees AI revenue “opportunities across third-party apps and partnerships as well as first-party opportunities” without elaborating, a remark TechCrunch connects to investor questions about whether Apple could take a cut of third-party AI agents distributed through the App Store. Source Source TechCrunch