Apple built a trillion-dollar business on chips it designed. He can’t design the ones he needs AI fast enough, so he goes shopping.
The iPhone maker is looking to acquire artificial intelligence chips. He published information about this. In recent months, he has talked to bankers about deals and approached chip startups asking if he would sell. It’s a rare move for a company that almost never makes big acquisitions.
The reason is a problem that Apple cannot hide. Their own AI servers, running on in-house designed M2 Ultra chips, struggle. The heavy load behind the new, Siri working with Gemini instead, it runs on Nvidia chips in Google’s cloud. Apple tried to use their own machines for business and they failed.
Sliding chip
Apple has its own server chip, codenamed Baltra. It was due this year. It slipped. Bloomberg reports that a chip powerful enough to rival Nvidia won’t land until 2029, and the M5 Ultra refresh will fill the gap.
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Buying your way to an answer would break Apple’s habits. His biggest deal was the $3 billion purchase of Beats in 2014. He built his entire chip empire on a smaller acquisition: PA Semi, in 2008 for $278 million.
Even this year’s costs seem modest compared to its competitors. Apple paid nearly $2 billion for Israeli AI startup Q.ai, its second-biggest deal ever.
A more open wallet
Two things indicate that Apple is willing to spend more. Its chief financial officer, Kevan Parekh, told analysts that the company would abandon its long-standing goal of holding as much cash as debt. That drains cash, and Apple sat on $45.6 billion of it at the end of March.
The other is people. Tim Cook is handing over the CEO job to hardware chief John Ternus in September, and chip chief Johnny Srouji now oversees all of Apple’s hardware. Both are engineers and both may be more prepared to get out of trouble.
It still depends on others
Purchases are just one way. There is also Apple It talks to PrismMLA startup that shrinks large AI models to run on the iPhone. And he just obliged A $30 billion chip from Broadcoma partnership It was extended until 2031.
They all point the same way. Apple wants to distance itself from Nvidia and is more extensive memory and hardware compression reshaping the industry. Designing your own silicone is a long game. Buying someone else’s can be a shortcut. The fact that a company that maintains its independence needs both is a true story.
