Apple Partners with Broadcom to Develop AI Server Chip
Apple is reportedly collaborating with Broadcom to create its first AI-focused server chip, according to The Information, via Yahoo. This move positions Apple alongside other technology giants designing custom chips to support advanced artificial intelligence applications while reducing dependence on Nvidia’s high-cost, limited-supply processors.
AI Chip Development Underway
The project, internally code-named Baltra, marks a significant step for Apple in its pursuit of cutting-edge AI capabilities. The chip is expected to enter mass production by 2026, leveraging Taiwan Semiconductor Manufacturing Co.’s (TSMC) advanced N3P manufacturing process, as per the report.
While Apple and Broadcom have yet to comment publicly on the collaboration, Broadcom’s shares surged by 5% following the news. This development reflects the growing demand for AI technology and the strategic importance of custom hardware in maintaining competitive advantages.
Expanding In-House Chip Capabilities
Apple’s focus on designing its chips is not new. The company successfully transitioned to its M-series processors, replacing Intel chips in Mac laptops. At its Worldwide Developers Conference (WWDC) in June, Apple also highlighted its intent to integrate in-house server chips to power AI features across its devices.
However, Apple’s efforts align with broader trends in the technology sector. Many companies are developing proprietary AI hardware to mitigate reliance on Nvidia’s dominant market position. While this strategy has proven challenging for some, Google has managed to reduce its dependence on Nvidia by leveraging its collaboration with Broadcom.
Broadcom’s Role in the Generative AI Boom
Broadcom has emerged as a key player in the AI sector, capitalizing on the rapid adoption of generative AI technologies. The company’s growth has been fueled by partnerships with major cloud providers and a diversified supply chain. Its shares have gained 54% in 2024, building on a near doubling of its value the previous year.
Broadcom’s central rival in the custom AI chip space, Marvell Technology, also sees significant growth potential. Marvell predicts that the market for custom AI chips could reach $45 billion by 2028, with Broadcom and Marvell leading the industry.
Apple’s Long-Term Vision
The collaboration between Apple and Broadcom underscores the importance of innovation in AI hardware. By integrating AI capabilities into its ecosystem, Apple aims to enhance user experiences across its devices while reducing reliance on third-party suppliers.
Apple’s multi-billion-dollar partnership with Broadcom, established last year to develop 5G components, further solidifies the companies’ relationship and shared commitment to advancing semiconductor technologies.
As the competition in AI hardware intensifies, Apple’s Baltra chip could mark a turning point in the race to develop efficient and scalable AI processing solutions.
