Apple Finally Pushes Into AI

Technology

Published: May 7, 2024 6:25 am

Apple Inc. (NASDAQ: AAPL) is moving into artificial intelligence (AI). That is a business in which many think it was left behind by companies such as Alphabet and Microsoft. Apple appeared to be in enough AI-based trouble that it may have turned to Google and Microsoft for AI software for its devices. It appears Apple’s move into the sector will involve chips that run servers, not consumer-facing products.

According to several reports, Apple’s server chips will be released soon. The Wall Street Journal reports:

Over the past decade, Apple has emerged as a leading player designing chips for iPhones, iPads, Apple Watch and Mac computers. The server project, which is internally code-named Project ACDC—for Apple Chips in Data Center—will bring this talent to bear for the company’s servers, according to people familiar with the matter.

Speculation remains about how Apple’s AI chips might be integrated into iPhones, iPads, and Macs. New Macs will be released soon. While they are one of the company’s oldest products, their sales are nowhere near as important to the company as those of the iPhone.

The release of the iPhone 16 may be among the most important product launches in Apple’s history, but iPhone sales are in trouble, based on the most recent earnings report. iPhone revenue dropped from $51.3 billion in the year-ago quarter to $46 billion in the most recently reported quarter. The iPhone 15 has been criticized for not being enough of an upgrade from the iPhone 14. A faster chip and slightly better camera may not excite people who could buy the iPhone 16.

Will Apple’s move into AI chips be enough to calm investors who want to see more AI-based features in the new iPhone? People will have to wait for its release in September.

Also see: A Once-in-a-Generation Investment: 1 AI Stock You Don’t Want to Miss Out On

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