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On Wed, 26 Mar, 12:05 AM UTC
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Apple is about to spend $1 billion on NVIDIA servers for AI: analyst - 9to5Mac
Amid recent reports of Apple struggling in its AI efforts, particularly with Siri, a new analyst report indicates the company is close to laying down a full $1 billion in new purchases of NVIDIA's AI servers. Patrick Seitz writes at Investor's Business Daily: Loop Capital analyst Ananda Baruah late Monday said Apple is in the process of placing orders for about $1 billion in Nvidia GB300 NVL72 systems. That equates to about 250 servers at $3.7 million to $4 million each, he said in a client note. Apple is working with server builders Dell Technologies and Super Micro Computer on its large server cluster to support generative AI applications, Baruah said. "AAPL is officially in the large server cluster Gen AI game ... and SMCI & DELL are the key server partners," he said. "While we are still gathering fuller context, this appears to have the potential to be a Gen AI LLM (large language model) cluster." There seems to be a lot of speculation in the report regarding the intended uses of the new servers, but this kind of investment in NVIDIA's GB300 NVL72s does point in a clear direction. Reports have indicated in the past that Apple is developing its own chip intended for server use. However, it seems progress on that front is either moving slower than expected, or else Apple has decided it needs to supplement with NVIDIA's servers. In any case, this is further evidence of Apple's efforts to be well equipped for years of AI investment to come. What do you make of Apple potentially investing so much in NVIDIA AI servers? Let us know in the comments.
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Apple is reportedly investing heavily into Nvidia servers for AI development
Perhaps defying Apple's very public claim that it is using Apple Silicon servers to run Apple Intelligence, an analyst insists the company is now spending $1 billion to buy Nvidia systems as well. In April 2024, there were the rumors that Apple would use its own Apple Silicon processors to run its AI servers. Then in June 2024, the expectation was that whole data centers would be run on Apple Silicon chips. By September 2024, it was certain. Apple's Craig Federighi said its Apple Intelligence servers were on Apple Silicon, and that this was crucial to making the company's AI services private. Yet now according to Loop Capital analyst Ananda Baruah -- as spotted by Investor's Business Daily -- Apple is in the process of spending around $1 billion to order in new Nvidia servers specifically for generative AI. "AAPL is officially in the large server cluster Gen AI game and SMCI [Super Micro Computer] & Dell are the key server partners," he wrote in a note to investors. "While we are still gathering fuller context, this appears to have the potential to be a Gen AI LLM (large language model) cluster." Baruah claims that Apple is buying 250 Nvidia NVL72 servers at a cost of between $3.7 million and $4 million each. According to Nvidia, its NVL72 server contains 36 Grace CPUs and 72 Blackwell GPUs. The company also says that, as of March 18, 2025, that this server is not yet available. Doubtlessly Apple could pre-order the servers now, and it's not surprising that the company sees a need to expand its servers. Given the quantities, this may be for development purposes, and not public-facing, but there's no way to tell right now -- and that's assuming the report is correct. If it's for more than development, this just doesn't quite fit with Federighi's claim that he thinks using Apple Silicon servers "sets a new standard for processing in the cloud in the industry." "Building Apple Silicon servers in the data center when we didn't have any before [and] building a custom OS to run in the data center was huge," he said. "[Creating] the trust model where your device will refuse to issue a request to a server unless the signature of all the software the server is running has been published to a transparency log was certainly one of the most unique elements of the solution -- and totally critical to the trust model."
[3]
Apple might up its AI game with a $1 billion order of Nvidia servers, analyst says
Apple (AAPL-1.31%) has traditionally not been a big player in artificial intelligence model training or server infrastructure. But that might change pretty soon. "Apple is officially in the large server cluster Gen AI game... and Super Micro Computer (SMCI-8.71%) & Dell (DELL-2.85%) are the key server partners," Loop Capital Markets analyst Ananda Baruah said in an analyst note on Monday. Large server clusters are big groups of high-powered servers used to train and run complex AI models, like those used in generative AI. The tech giant is reportedly placing roughly $1 billion worth of orders of Nvidia's (NVDA-5.99%) GB300 NVL72 server platform, including the company's next-generation Blackwell Ultra chips, built by Super Micro and Dell. With each server costing around $3.7 million to $4 million, Baruah estimates that Apple is buying approximately 250 servers. Apple didn't immediately respond to Quartz's request for comment. Baruah expects Apple to use these servers to run or train generative AI large language models. The move could have stemmed from the intense backlash Apple received in response to its decision to delay a much-anticipated generative AI upgrade of its voice assistant Siri. Apple began working on integrating advanced AI technology into its products as part of its Apple Intelligence initiative, which the company introduced last June at its annual developer conference, WWDC. The tech giant first teased a so-called "LLM Siri" based on advanced large language models last year, in an effort to scale its generative AI capabilities and catch up to industry rivals like OpenAI and Amazon. Although an arrival date was never publicly set, LLM Siri was widely anticipated to come in an iOS 18.4 upgrade expected next month. Now, the AI-infused Siri will likely be unveiled next year. Apple pulled its previous ads featuring the capability. The decision to delay LLM Siri's rollout faced intense investor and consumer backlash, and the company was hit with a federal lawsuit last week. The suit demands unspecified financial damages on behalf of those who purchased new products in anticipation of the generative AI upgrade. "Apple's advertisements saturated the internet, television, and other airwaves to cultivate a clear and reasonable consumer expectation that these transformative features would be available upon the iPhone's release," the lawsuit said. Loop Capital analysts' initial work suggests that the LLM Siri debacle could partly be due to Apple's preference to use traditional AI and machine learning, rather than more advanced generative AI. But Apple's alleged purchase of these servers could signal a shift in preference towards the latter, Baruah said.
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Apple becomes NVIDIA customer, orders estimated $1 billion of new GB300 NVL72 AI servers
TL;DR: Apple has ordered $1 billion worth of NVIDIA's GB300 NVL72 AI servers, indicating a strategic shift towards enhancing its AI capabilities, particularly in response to challenges with Siri. These servers, made by Super Micro and Dell, will form a Gen AI LLM cluster, highlighting Apple's increased focus on advanced AI hardware. Apple has reportedly placed a large order for $1 billion worth of NVIDIA's new GB300 NVL72 AI servers, powered by its beefed-up Blackwell Ultra AI GPUs according to Loop Capital. Loop Capital's note explained that Apple is "officially" in the large server cluster Gen AI game, with Super Micro and Dell being Apple's key server partners. Apple's continued Siri AI stumbles might have seen an internal shift that is putting even more importance on AI, and that requires the best AI hardware on the market right now: NVIDIA's new GB300 NVL72 AI servers. NVIDIA's new GB300 NVL72 AI servers cost around $3.7 million to $4 million each, so we're looking at around 250 new NVIDIA GB300 NVL72 AI servers, made by both Super Micro and Dell. This should see Apple with a Gen AI LLM cluster, which should change things up for Apple as the company seems to be having issues with its AI/ML (machine learning) versus GenAI. In their full note, Loop Capital wrote: "Apple is officially in the large server cluster Gen AI game... and Super Micro & Delll are the key server partners. Our work suggests that AAPL's latest Siri kerfuffle may be compelling a bit of a strategy shift internally and that AAPL is in the process of placing orders for ~$1.0B of NVIDIA GB300NVL72s (or ~250 servers at $3.7M-$4.0M each), comprised of both Super Micro & Dell. While we are still gathering fuller context, this appears to have the potential to be a Gen AI LLM cluster, and for what it's worth, our initial work suggests that a contributing factor to Siri's ongoing issues may have been AAPL's proclivity to use AI/ML (machine learning) vs Gen AI heretofore (whoops). It appears that our latest work could represent a shift in AAPL's thinking towards using Gen AI vs AI/ML".
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Apple is reportedly ordering $1 billion worth of NVIDIA's advanced AI servers, indicating a significant move to boost its AI capabilities and potentially address recent challenges with Siri development.
In a significant move that signals a potential shift in Apple's artificial intelligence strategy, the tech giant is reportedly placing orders for approximately $1 billion worth of NVIDIA's advanced AI servers. This development comes amid recent challenges faced by Apple in its AI efforts, particularly with its voice assistant, Siri 13.
According to Loop Capital analyst Ananda Baruah, Apple is in the process of ordering about 250 NVIDIA GB300 NVL72 systems, each costing between $3.7 million and $4 million 12. These high-powered servers are designed specifically for generative AI applications and will form a large server cluster for AI processing 3.
Apple is reportedly working with server builders Dell Technologies and Super Micro Computer to construct this large server cluster 14. This collaboration suggests that Apple is making a concerted effort to establish a robust infrastructure for its AI initiatives.
This substantial investment in NVIDIA hardware may indicate a strategic pivot for Apple. The company has traditionally relied on its own Apple Silicon for AI processing, with Craig Federighi previously stating that Apple Intelligence servers ran on Apple Silicon to ensure privacy 2. However, the recent move towards NVIDIA servers could suggest that Apple is supplementing its in-house capabilities or potentially reevaluating its approach to AI development 13.
The timing of this investment is particularly noteworthy given the recent setbacks Apple has faced with Siri. The company recently delayed a much-anticipated generative AI upgrade for Siri, leading to backlash from investors and consumers 3. Loop Capital analysts suggest that Apple's preference for traditional AI and machine learning over more advanced generative AI may have contributed to these challenges 3.
This significant investment in NVIDIA's AI hardware could have far-reaching implications for Apple's future AI capabilities. It may enable the company to accelerate its development of large language models (LLMs) and other generative AI applications 24. This move could potentially help Apple catch up with competitors in the AI space and address the growing demand for more advanced AI features in its products 3.
Apple's entry into the "large server cluster Gen AI game" as described by analysts, could have ripple effects across the tech industry 14. It not only represents a major customer win for NVIDIA but also underscores the increasing importance of powerful AI hardware in the competitive landscape of tech giants.
As Apple continues to navigate the challenges and opportunities presented by AI, this substantial investment in NVIDIA servers may prove to be a pivotal moment in the company's AI strategy. The tech world will be watching closely to see how this move translates into new AI capabilities and features in Apple's future products and services.
Reference
Apple is reportedly in discussions with Foxconn and Lenovo to manufacture AI servers using Apple Silicon, aiming to power its Apple Intelligence services and boost its AI capabilities.
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Apple has reportedly opted for Google's Tensor Processing Units (TPUs) instead of Nvidia's GPUs for its AI training needs. This decision marks a significant shift in the tech industry's AI hardware landscape and could have far-reaching implications for future AI developments.
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Apple reveals its use of Amazon Web Services' custom AI chips for services like search and considers using Trainium2 for pre-training AI models, potentially improving efficiency by up to 50%.
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Apple is reportedly developing a custom AI server chip codenamed 'Baltra' in partnership with Broadcom, aiming to bolster its cloud-based AI processing capabilities. The chip is expected to enter production by 2026, potentially leveraging advanced packaging technologies.
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Broadcom CEO Hock Tan discloses that three major hyperscalers aim to deploy 1 million AI chips by 2027, signaling a shift in the AI hardware landscape and potential competition for Nvidia.
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