Apple, the world’s most valuable company, said Wednesday that it will spend $350 billion on development and create 20,000 jobs in the United States in the next five years, outlining for the first time how it will invest in the U.S. economy following the new tax law passed late last year.
Apple said it expects to pay $38 billion on its massive cash holdings overseas. The payment takes advantage of a one-time tax break for companies that bring back cash to the United States under the new tax law. So far, this is the largest payment of that kind, experts said.
“On the one hand, this is a record payment. On the other hand, it shows how successful they’ve been at gaming the system” around the world, said Edward Kleinbard, a law professor at the University of Southern California.
In its last earnings report, Apple said it held $252 billion in cash overseas. It appears, given the new corporate tax rate of 15.5 percent, that it is returning a majority of this to the United States.
Apple has for years faced scrutiny and criticism around the world for its tax policies. The company recently agreed to pay more than $100 million (81 million pounds) in taxes to British authorities after an audit.
It has also lobbied for the United States to ease tax rates on foreign profits brought back to the country, saying that such changes would allow the company to invest more freely in the U.S. economy.
“We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness,” Apple chief executive Tim Cook said in a statement. “We have a deep sense of responsibility to give back to our country and the people who help make our success possible.”
That echoes statements Cook made last year, when he told the New York Times that companies have a “moral responsibility” to expand the economy in the United States.
The White House applauded Apple’s announcement. “Just as the president promised, making our businesses more competitive internationally is translating directly into benefits for the American worker, through increased wages, better benefits, and new jobs,” Lindsay Walters, a deputy White House press secretary, said in a statement. Other companies, including AT&T, American Airlines and Walmart, have also linked employee bonuses to the new law.
President Trump himself lauded Apple in a message on Twitter, and drew a direct line between the company’s announcement and the tax law. “Great to see Apple follow through as a result of TAX CUTS,” Trump tweeted.
I promised that my policies would allow companies like Apple to bring massive amounts of money back to the United States. Great to see Apple follow through as a result of TAX CUTS. Huge win for American workers and the USA! https://t.co/OwXVUyLOb1
— Donald J. Trump (@realDonaldTrump) January 17, 2018
In addition to the tax payment, Apple said that over the next few years it will significantly add to the 84,000 employees it has in the United States. The new jobs will come from hiring at Apple’s current locations and from a new campus focused on technical support for customers. Apple will announce its location later this year. It also said that it plans to build several new data centers in the United States — including previously announced projects in North Carolina and Iowa — and said it broke ground on a new facility Wednesday in Reno, Nev. Overall, Apple will spend $10 billion on building data centers as part of a $30 billion investment in capital expenditures.
It’s not clear how much of a change this is from what the company is currently spending. Apple has spent between $12 billion and $15 billion on projects such as facilities or land globally in the past few years, though it has not said how much of that went to U.S. projects.
The company did not say how much of its investments announced Wednesday were already planned.
Apple has faced repeated criticism from U.S. lawmakers for not making more of its products, such as the iPhone, the iPad and Mac computers, in the United States. Apple does make some hardware in the United States, but most of its products are produced and assembled in China. The company has in recent years focused on building more facilities in the United States.
It is also increasing the size of a previously announced manufacturing fund to support its network of suppliers for parts that go into its devices. That fund will increase from $1 billion to $5 billion. This fund has already bankrolled initiatives in Kentucky and Texas; Apple did not offer further details on where it may invest in U.S. manufacturing in the future.
Further investment will also go into coding and app-development education initiatives.
Analysts said that overall the news will reflect well on Apple. “We believe 80 percent of Apple’s motivation related to today’s news is for economic reasons, 20 percent for political reasons, and both are good for the company long term,” said Gene Munster, a longtime Apple analyst and managing partner of Loup Ventures, said in a note to investors.
Apple’s stock closed up 1.65 percent to $179.10 on Wednesday.