- Apple shares rose over 3% amid reports of AI chip startup acquisition talks
- Apple aims to enhance AI server infrastructure amid growing generative AI competition
- Current AI workloads use in-house M2 Ultra chips and Google Cloud Nvidia servers
Apple Inc. shares climbed more than 3% after a report said the iPhone maker is exploring acquisitions of semiconductor startups to bolster its artificial intelligence capabilities.
According to The Information, Apple has held discussions with investment bankers in recent months and approached several AI chip startups to gauge their interest in potential deals. The reported move is aimed at strengthening Apple's AI server infrastructure as competition in generative AI intensifies.
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The report said Apple currently relies on its in-house M2 Ultra chips for some AI data centre workloads. However, for more compute-intensive tasks, including running a version of Google's Gemini model to power next-generation Siri features, the company has relied on Google Cloud's Nvidia-powered infrastructure.
Apple is also reportedly facing delays in its next-generation AI server chip, codenamed Baltra, which was initially expected to debut this year, adding urgency to its search for external AI chip expertise, The Information reported.
While Apple has traditionally favoured smaller acquisitions worth hundreds of millions of dollars, the company has shown a greater willingness to pursue larger deals.
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Earlier this year, Apple acquired Israeli AI startup Q.ai for nearly $2 billion, marking its second-largest acquisition after its $3 billion purchase of Beats Electronics in 2014, according to the report.
Apple has previously used acquisitions to build its semiconductor business. Its $278 million purchase of PA Semi in 2008 laid the foundation for the company's custom Apple Silicon chips that now power iPhones, iPads and Macs.
Apple has not publicly commented on the report.
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