Rumor: Apple plans to spend big on artificial intelligence serves this year and next

In a Medium post, analyst Ming-Chi Kuo says his latest survey indicates that Apple plans to purchase 2,000–3,000 and 18,000–20,000 units of artificial intelligence (AI) servers in 2023 and 2024, respectively. 

This would represent about 1.3% and 5% of worldwide AI server shipments in 2023 and 2024, respectively. Each Nvidia HGX H100 8-GPU server (which Kuo thinks Apple will purchase) is priced at around US$250,000. Therefore, he estimates that Apple will spend at least about $620 million in 2023 and $4.75 billion in 2024 on AI server purchases.

From Kuo’s post: Apple’s AI server purchases are significantly lower in 2023 than in 2024 due to a shortage of Nvidia AI chips starting from 2Q23, compounded by Apple placing its orders later than other major customers.

However, even when the supply of Nvidia AI chips improves in 2024, Apple’s AI server purchases still lag behind its competitors. Taking Meta as an example, its AI server purchase in 2024 will be about 40,000 units. Not to mention, Meta’s AI server count before 2024 already far exceeds that of Apple.

Along the same lines, in his latest “Power On” newsletter, Bloomberg’s Mark Gurman says that “one of the most intense and widespread endeavors at Apple Inc. right now is its effort to respond to the AI frenzy sweeping the technology industry.”

He says that, as noted before, the company built its own large language model called Ajax and rolled out an internal chatbot dubbed “Apple GPT” to test out the functionality. The critical next step is determining if the technology is up to snuff with the competition and how Apple will actually apply it to its products, according to Gurman.

He says that Apple’s senior vice presidents in charge of AI and software engineering, John Giannandrea and Craig Federighi, are spearheading the effort. On Cook’s team, they’re referred to as the “executive sponsors” of the generative AI push. 

“Eddy Cue, the head of services, is also involved, I’m told. The trio are now on course to spend about $1 billion per year on the undertaking,” Gurman writes. “Giannandrea is overseeing development of the underlying technology for a new AI system, and his team is revamping Siri in a way that will deeply implement it. This smarter version of Siri could be ready as soon as next year, but there are still concerns about the technology and it may take longer for Apple’s AI features to spread across its product line.”

Also from his report: 

° Federighi’s software engineering group is adding AI to the next version of iOS. 

° Apple’s software engineering teams are also looking at integrating generative AI into development tools like Xcode.

° Cue’s organization is pushing to add AI to as many apps as possible. The group is exploring new features for Apple Music, including auto-generated playlists, as well as the company’s productivity apps.

This info from Gurman is from the free edition of “Power On”. If you like it, consider subscribing to Bloomberg.com—you’ll receive the newsletter earlier and get exclusive access to a Q&A section.

What’s more, a report today at TechCrunch says that has shared several job opportunities listing specific needs for generative AI in the last few weeks. For instance, a role on the App Store platform says that the company is “working on a generative AI-based developer experience platform for internal use and assist our app development team.”

Another job in the Apple Retail department mentions working on a “conversational AI platform (voice and chat)” to engage with customers. Apple’s job listing also notes tasks such as building text-generation tech such as “long-form text generation, summarization, question-answering.”

TechCrunch notes that some other job listings in AI/ML point toward working on fundamental models and list a “human-like conversational agent” as an example of applications that could be developed through it. The tech giant has also posted requirements in departments like Siri Information Intelligence, a unit that handles features such as Siri and Spotlight search. Additionally, Apple is actively looking to work with people working on making models work locally on devices.

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