Published: Sat, January 20, 2018
Money | By Armando Alvarado

Apple will invest $10 billion in data centres

Apple will invest $10 billion in data centres

Apple made its decision following the recent passage of landmark tax reform legislation by Trump and the Republican controlled congress. Apple will bring back $350 billion to the US over the next five years, will open another campus and create 20,000 domestic jobs.

"Combining new investments and Apple's current pace of spending with domestic suppliers and manufacturers - an estimated $55 billion for 2018 - Apple's direct contribution to the U.S. economy will be more than $350 billion over the next five years, not including Apple's ongoing tax payments, the tax revenues generated from employees' wages and the sale of Apple products". "Huge win for American workers and the US!" Much of the cash now held overseas will probably flow back to them.

That anticipated tax bill implies Apple intends to bring back about US$245 billion of its overseas cash, based on the temporary tax rate of 15.5 percent on foreign profits.

However, most of the US$350 billion reflects money that Apple planned to spend with its suppliers and manufacturers in the U.S. anyway, even if corporate taxes had remained at the old 35 percent rate. The company had slightly more than US$250 billion in overseas subsidiaries at the end of the third quarter of 2017. The spree will include the new campus, new data centers and other investments.

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Apple will invest $10 billion in data centres

Apple said it plans to spend $55 billion with US -based suppliers in 2018, up from $50 billion past year.

It "does not result in a meaningful increase", the analyst said. That helped the S&P 500 hit yet another record close above 2,800 on Wednesday, as recent changes to US tax laws continue to fuel the bull market in stocks.

About 84,000 of Apple's 123,000 workers are in the US. "I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States", the president tweeted on Wednesday.

Apple announced in a statement on Wednesday that it plans to accelerate USA investment and create thousands of new jobs. However, he also sees some potential risks on the horizon.

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