Apple Cuts Engineers' Daily AI Budgets From $300 to as Low as $25 as Ternus Reins In Costs

Apple engineers used to be able to burn through $300 of AI every day. Under new CEO John Ternus, that allowance is shrinking fast, and for some teams it may soon look more like pocket change.

Some engineers saw their daily AI spending caps drop from $300 to $200 in October, Bloomberg reports, and Apple plans to go further. The next round could take some engineering teams down to $100 a day. Many staff outside engineering already live on a $100 daily cap, and Apple has considered pushing that to $25 for some teams. Apple declined to comment.

Paying by the token

The budgets cover tokens, the units of data AI models chew through. Writing and debugging code eats a lot of them, which is why engineers got the biggest allowances in the first place.

Apple is not taking the tools away. Staff can still use Anthropic's Claude, OpenAI's ChatGPT, Google's Gemini and other models, and anyone who needs more can ask senior leaders for an exemption. But some teams have been told to switch to cheaper models, or to ones that run on the device itself.

That cuts against the mood elsewhere in Silicon Valley. The industry has spent the year tokenmaxxing, treating heavy token use as a sign of productivity, with Meta even running internal leaderboards. Coding tools like Claude Code, OpenAI Codex and Cursor have made it very easy to rack up a bill.

A leaner Apple

Ternus took over as CEO on 1 September and has been pushing the company to move faster and run leaner, cutting layers of management. Some divisions have brought in outside consultants to review how efficiently they work.

The money behind the push is real. Apple's annual report this week showed research and development costs up 32% in fiscal 2026, driven by higher infrastructure and AI costs, while operating expenses rose 22% to $75.5 billion. The same AI cost spiral that has squeezed memory out of consumer PCs and sent DRAM prices soaring is now showing up as hard daily caps on Apple's own desks.

Inside the company, reaction is split. Some employees say few people ever used the full $300 anyway. Others read the caps as part of wider cost cutting and worry about what comes next, after Apple cut more than 200 jobs in August.

Everyone is setting limits

Apple is hardly alone in rationing. Microsoft set division-level AI budgets in July, and Tesla caps staff at $200 a week.

For a company that spent years telling the world the future runs on its own silicon, steering employees toward on-device models has a certain logic. It also shows how fast the open-tab era of corporate AI is closing, even at one of the richest companies on the planet.

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