Apple is reportedly seeking to acquire AI chip companies to enhance its processing power amid performance issues with its current M2 Ultra-powered servers. The company has engaged in talks with semiconductor manufacturers and bankers regarding potential acquisitions that would improve its server capabilities.
According to The Information, Apple has encountered difficulties with servers that use M2 Ultra chips for AI tasks. Heavier workloads, such as those from the Gemini model powering Siri AI, are currently dependent on NVIDIA chips operating on Google Cloud. Apple attempted to utilize its infrastructure for these tasks but found it insufficient.
Bloomberg reported that a new server chip based on the M7 Ultra will not be available until 2029. However, Apple plans to enhance its infrastructure soon with M5 Ultra chips. Additionally, a next-generation server chip, codenamed “Baltra,” was initially expected to launch this year, but that timeline appears to have been delayed.
Last week, Apple finalized a $30 billion deal with Broadcom for chips manufactured in the United States. The company’s expertise in chip design has primarily concentrated on consumer devices, prompting the move to seek additional support in the server domain.
Apple began developing its own chips after acquiring PA Semi for $278 million in 2008. The company does not typically make large acquisitions but recently spent nearly $2 billion on AI startup Q.ai, marking its second largest acquisition after the $3 billion spent on Beats.
Given the high demand for chips in the AI sector, Apple may need to pay a premium for any acquisitions in this area. As of March, the company had $45.6 billion in cash and cash equivalents available, providing significant flexibility for future deals.
