Apple in Talks with Foxconn and Lenovo to Build AI Servers for Apple Intelligence

Apple wants to be the great revolution in AI: building servers for artificial intelligence with its Apple Silicon - Softonic

Apple wants its vision of AI to dominate the artificial intelligence landscape Today we have learned that Apple plans to use its own Apple Silicon processors for its AI servers, which will be used, among other things, to power its Apple Intelligence services, reports the media outlet Nikkei. The company has contacted Foxconn and Lenovo to build the machines and has specifically asked them to manufacture the servers in Taiwan. While one of Apple's reasons for assembling these machines in Taiwan is to reduce its dependence on China, another is to take advantage of the talent and R&D resources that Foxconn takes advantage of for its Nvidia-based AI servers. Apple is considering the production of AI servers in Taiwan, at Foxconn facilities, to enhance its computing capabilities for new generative AI features in its devices. However, Foxconn, Apple's main manufacturing partner, is also the world's largest manufacturer of AI servers, and primarily manufactures machines based on Nvidia's GPUs, such as the H100 and H200. For now, Foxconn's capacity in Taiwan is quite limited, as the company is preparing to start mass production of machines based on GB200 with Blackwell architecture. Apparently, this is one of the reasons why Apple wants to produce its AI machines in Taiwan: to leverage the expertise Foxconn has gained working on Nvidia projects. Apple's AI approach differs from that of cloud service providers like Microsoft and Amazon, as it focuses more on AI inference than on training large-scale language models. Therefore, Apple will not need servers with sophisticated technologies like liquid cooling. Additionally, since Apple's AI servers are intended for internal use, the production scale will be relatively small compared to Nvidia's GB200 AI machines. That also poses a problem, as companies like Foxconn and Lenovo prefer clients with large orders. Even so, as Apple rolls out its Apple Intelligence service to more users, it will need more AI servers, making it a lucrative client. The development of AI server infrastructure is crucial for Apple's next-generation products, as the company tries to keep up with competitors like Amazon, Google, and Microsoft, all of which are significantly expanding their investments in AI servers. Due to Foxconn's limited capacity in Taiwan, Apple is also in talks with Lenovo and its subsidiary LCFC to assist with server designs. To diversify and mitigate dependence on Chinese suppliers, Apple and Lenovo are exploring new production capabilities outside of China. The possibility of smaller suppliers, such as Universal Scientific Industrial, supporting production is also being considered.

Apple has allegedly approached Foxconn and Lenovo to build AI servers based on Apple Silicon

To take advantage of Foxconn's knowledge of Nvidia-based machines. Apple plans to use its own Apple Silicon processors for its AI servers, which will be used, among other things, to power its Apple Intelligence services in the data center, reports Nikkei. The company has approached Foxconn and Lenovo to build the machines and has specifically asked them to make the servers in Taiwan. While one of Apple's reasons for assembling these machines in Taiwan is to reduce its reliance on China, another is to tap into the talent and R&D resources that Foxconn leverages for its Nvidia-based AI servers. Apple is exploring the production of AI servers in Taiwan at Foxconn's facilities to bolster its computing abilities for new generative AI features across its devices. However, Foxconn, Apple's primary manufacturing partner, also happens to be the world's largest maker of AI servers, primarily making machines based on Nvidia's GPUs, such as the H100 and H200. For now, Foxconn's capacity in Taiwan is fairly limited, as the company is gearing up to start volume production of GB200-based machines featuring the Blackwell architecture. This is reportedly one of the reasons why Apple wants to produce its AI machines in Taiwan: to leverage the experience that Foxconn has gained while working on Nvidia projects. "One of the reasons Apple wants Foxconn to make servers in Taiwan is its hope to tap into the engineering talent and R&D resources that work on Nvidia projects," a source with knowledge of the matter told Nikkei. Neither Apple nor Foxconn commented on the report. Apple's AI approach differs from that of cloud service providers like Microsoft and Amazon, as it focuses more on AI inference rather than training large-scale language models. Therefore, Apple will not need servers with sophisticated technologies like liquid cooling. Also, since Apple's AI servers are intended for internal use, the scale of production will be relatively small compared to Nvidia's GB200 AI machines. That poses a problem, too, as companies like Foxconn and Lenovo prefer clients with large orders. Still, as Apple rolls out its Apple Intelligence service to more users, it is going to need more AI servers, so it remains a lucrative client. Apple's experience in data center server design lags behind that of Nvidia, so it is seeking support from suppliers for engineering and design services. On the other hand, Apple's servers are not as sophisticated as Nvidia's GB200 machines, so the development and validation process should be relatively quick. Developing AI server infrastructure is crucial for Apple's next-generation products, as the company tries to keep up with competitors like Amazon, Google, and Microsoft, all of which are significantly expanding their AI server investments. Due to limited capacity at Foxconn in Taiwan, Apple is also in talks with Lenovo and its subsidiary LCFC to assist with server designs. To diversify and mitigate reliance on Chinese suppliers, Apple and Lenovo are discussing additional production capabilities outside of China. Smaller suppliers like Universal Scientific Industrial are also considered to support production. Foxconn operates AI labs in Hsinchu, Taiwan, and San Jose, California, where it works closely with Nvidia to develop the next generation of servers, dubbed the GB300, the report says.

Apple in talks with Foxconn to build AI servers in Taiwan

Apple wants to tap the talent at Foxconn to power its Apple Intelligence servers, though the supplier may already be at capacity. Apple has been ramping up efforts for Apple Intelligence, its user-centric suite of artificial intelligence tools. Consequently, the company aims to manufacture specialized servers to enhance its computational power. Currently, the company is in talks with Foxconn, its largest iPhone supplier. The Taiwanese supplier already provides a similar service for Nvidia. Apple hopes to build its servers using Apple Silicon, which is already used on the user-side of Apple Intelligence features in Macs and iPads. According to Nikkei Asia, Apple's volume of servers would be relatively small compared to Nvidia's. Nvidia's GB200 system is currently the world's most powerful AI computing vehicle. It follows that Apple would want to utilize Foxconn's resources to power its own. However, Foxconn's relationship with Nvidia could potentially be the reason it can't commit to Apple. According to anonymous sources from Nikkei Asia, Foxconn is currently preoccupied with constructing server centers for Nvidia. Furthermore, Apple's relatively recent entry into the market would likely require additional support during the initial stages, potentially straining the already limited resources available at Foxconn. As a result, Apple has begun exploring other partnerships, including China's Lenovo Group and its subsidiary LCFC, and smaller suppliers such as Universal Scientific Industrial. Allegedly, Apple's talks with Lenovo involve building servers outside of China. Apple has begun rolling out Apple Intelligence features to compatible devices, such as the iPhone 15 Pro line, the iPhone 16 lineup, and its M-series iPads and Macs. As of now, Apple Intelligence is limited to U.S. English, but the company plans to expand its language catalog soon.

Foxconn Could Be Tapped To Produce Apple Intelligence Servers In Taiwan; Will Be Intended For Internal Use To Push The Company's Generative AI Capabilities

The release of iOS 18.1 signifies that Apple Intelligence is ready for primetime, but there is a tremendous amount of work remaining, such as expanding upon generative AI features, which can only be completed with additional server capacity. To fulfill this expansion, Foxconn is said to be in talks with the technology giant regarding building the necessary hardware for this goal, but there is a possibility that more players may enter Apple's supply chain for this very purpose. The latest report from Nikkei Asia mentions that Apple and Foxconn have entered into discussions, with the world's largest iPhone assembling firm possibly being tasked the responsibility to mass produce servers that will allow millions of people to access cloud-based Apple Intelligence features. No agreement has been signed yet, so nothing is set in stone right now, primarily because Foxconn might have its hands full with building NVIDIA's AI servers, meaning that Apple's allocated capacity might be limited. The Cupertino firm may have anticipated this hurdle, which is why Apple is also said to be in talks with China's Lenovo Group and its subsidiary, LCFC, to help in the designing of these servers. It is also possible that other players, like Universal Scientific Industrial, will enter the supply chain for additional production capacity. The exact number of Apple Intelligence servers required for the upcoming batch was not mentioned, but the report does state that this hardware will be for internal use and could be a small order size. If it was any other firm other than Apple trying to ink an agreement with Foxconn, the latter might not have paid any attention to the small order size. However, the Chinese assembling giant's biggest customer is Apple, with approximately 60 percent of the world's iPhones coming out of Foxconn's Zhengzhou facility, so it would be in the manufacturer's best interest to give priority to its client. After all, the iOS 18.2 update is reported to arrive earlier and is said to arrive with more Apple Intelligence features, meaning that allocating sufficient server space is paramount.