Rapid Expansion and Painful End: Is Apple Following in Standard Oil's Footsteps?

As major US tech companies rush to spend hundreds of billions of dollars on artificial intelligence, Apple has chosen a different path, adopting the historic strategy of Standard Oil. So what connects the first oil empire and the tech giant?

Standard Oil

- In 1870, American John Rockefeller founded Standard Oil, and instead of entering the oil exploration sector, he focused mainly on refining, transportation, and sales, building an empire that dominated the sector in the United States.

Why did he stay away from exploration?

- Rockefeller realized that oil exploration is high-risk, so he left others to bear the cost of drilling, exploration, and extraction, while he focused on oil refining, where profits are more stable and the ability to reduce costs.

How did he control the market?

- Rockefeller was not content with refining; he expanded his influence by acquiring refineries and controlling transportation and distribution, until Standard Oil dominated about 90% of US refining capacity by the late 1880s.

Chaos

- The US oil sector suffered from chaos in the 19th century, as oil refineries competed with each other to lower prices. To eliminate this chaos, Rockefeller acquired competing refineries and also entered into partnerships with railway companies to ship oil.

How did the empire end?

- In 1911, the US Supreme Court ordered the breakup of Standard Oil into 34 companies due to monopoly, but the spin-off companies expanded over time to currently dominate the oil market, led by Chevron and ExxonMobil.

What is Apple's connection?

- Apple follows almost the same strategy. Just as Rockefeller did not risk investing in exploration in the 19th century because the oil sector was still in its infancy, Apple today avoids the artificial intelligence infrastructure race, as the sector currently requires huge investments without clear returns.

Who bears the cost of the race?

- While Apple avoids heavy spending on AI infrastructure, Alphabet, Amazon, Meta, and Microsoft together plan to invest about $650 billion during 2026, up from $410 billion in the previous year.

So what is its strategy?

- Apple is betting that its competitors will bear the cost of developing AI models, and then it will later adopt the best ones and integrate them into its devices. Reports indicate that Apple is considering acquisition deals in the AI chip sector.

Where does the strength lie?

- Apple is not betting on owning the best AI models, but on controlling the gateway to users. The company holds 10% of the global personal computer market, along with 20% of the smartphone market.

What is Wall Street's response?

- Wall Street has rewarded Apple, with its stock rising 21% since the beginning of 2026, regaining the title of the world's most valuable company, while Microsoft's stock fell 19% and Meta's 5% over the same period, amid investor concerns over heavy spending on AI infrastructure.

Will it face Standard's fate?

- In the end, it seems that Apple has copied Standard Oil's strategy, but the question remains: Will it face a breakup if it manages to dominate the AI market one day, as happened with the oil giant in the past?

Sources: Argaam - Barron's - Library of Congress - Reuters - IDC - Counterpoint Research

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