Report: Apple looking into buying chip startups to strengthen its AI infrastructure

The Information reports that Apple has been in talks with bankers and semiconductor startups as it explores acquisitions to strengthen its AI server capabilities. Here are the details.

Apple considers AI chip company acquisitions

According to The Information, Apple has been exploring potential acquisitions of semiconductor startups to “boost its efforts to build server chips for running AI.”

In recent months, the iPhone maker has talked with bankers about possible deals. It has also approached semiconductor startups to gauge their interest in selling themselves, the people said. Apple’s hunt for chip acquisitions comes as the company struggles with the performance of its own internal AI servers, which currently run on internally designed M2 Ultra chips.

The Information says Apple’s next-generation server chip, code-named Baltra, has slipped past its planned 2026 debut. In the meantime, Apple is using M2 Ultra-based systems for some of its own AI processing, while the more demanding tasks are handled by the Gemini-based model powering the new Siri, which runs on Nvidia GPUs in Google Cloud.

A big acquisition would be a departure from Apple’s usual M.O. of buying smaller startups from time to time, but it wouldn’t be unprecedented.

Apple paid $3 billion for Beats in 2014 and $1 billion for most of Intel’s smartphone modem business in 2019. Just a few months ago, it also acquired Israeli AI startup Q.ai for a reported sum of nearly $2 billion.

Additionally, The Information recently reported that Apple had held talks with PrismML, whose technology can shrink large AI models to run directly on iPhones, although no potential deal or valuation was reported.

All of this comes against the backdrop of a leadership transition and signs that Apple may be rethinking its broader acquisition strategy. The company’s CFO, Kevan Parekh, recently said Apple would no longer treat achieving a net cash-neutral position as a formal goal, a shift many saw as a way to give Apple more flexibility to pursue larger acquisitions.

To read The Information’s full report, follow this link.

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