Apple's Venture into AI
Apple is set to make a splash in the world of artificial intelligence, directly competing with tech giants like Google and Microsoft. To support this endeavor, the iPhone manufacturing giant will significantly ramp up its investments.
According to Ming-Chi Kuo, an analyst from TF International Securities, Apple is likely to spend billions on AI chips sourced from Nvidia (NVDA) to power its AI efforts. Kuo estimates that Apple will allocate at least $620 million to AI servers this year, with the figure surging to an impressive $4.75 billion next year. These calculations are based on projected purchases of 2,000-3,000 AI server units this year and 18,000-20,000 units next year.
Apple has yet to respond to inquiries regarding its AI plans.
As Kuo suggests, Apple is expected to procure AI servers based on the popular specification that employs eight networked Nvidia H100 chips. However, due to the current scarcity of Nvidia chips, major purchases are expected to occur only in 2024.
Despite Apple's substantial investments, it still trails behind counterparts such as Meta Platforms (META), which owns Facebook. Meta has already poured billions into AI infrastructure and views it as its primary investment moving forward. Kuo estimates that Meta will acquire approximately 40,000 AI server units in 2024.
While Apple has traditionally been tight-lipped about its AI endeavors, recent reports from Bloomberg indicate that the company plans to allocate around $1 billion annually for the development of generative AI. This includes the creation of a new and improved version of Siri, potentially ready for launch next year.
In summary, Apple's venture into artificial intelligence, backed by substantial investments in AI chips and servers, demonstrates its commitment to competing in this burgeoning field. The company aims to catch up with industry leaders and develop innovative AI solutions.
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