Apple's failed car project became the unexpected foundation for its AI chip dominance

Apple's failed self-driving car program left a legacy of powerful AI chips

Apple's self-driving car program never really got off the ground, but it may have been what made the company's chips the powerful AI performers they are. Early in the development of the self-driving platform, Apple realized that it would need powerful on-device AI processing. While the car processor was never finished, as Mark Gurman details in his latest Power On newsletter, it did lead to the development of the Neural Engine, the backbone of Apple's on-device AI processing. The Neural Engine made its debut with the iPhone X and the A11 Bionic. In those early days, it was primarily used for computer vision, powering FaceID, Animoji, and augmented reality features. But by laying the groundwork for on-device AI processing, Apple established itself as an early leader by bringing the Neural Engine to desktops with the M-series chips. While Apple's AI software efforts have lagged behind the rest of the industry, its hardware has been impressive. It's also what has allowed Apple to tout its privacy features, since less data is sent to the cloud. Apple is making its AI hardware a cornerstone of its strategy going forward. According to Gurman, the company is skipping the Pro, Max, and Ultra versions of its upcoming M6 chip. Instead, it's accelerating development of the M7, which should arrive in the first half of 2027 with significant Neural Engine upgrades. The M7 Ultra is expected to be the basis for a new server product from Apple as well, with support for up to 1.5TB of RAM.

Thank the dead Apple Car for Apple's upcoming AI-enhanced M7 chips

Apple shifted its approach to chip development to focus on chips with high-end AI capabilities. Bloomberg's Mark Gurman previously reported in June that while Apple plans to release the M6 chip in the entry-level MacBook Pro this fall, it's going to skip the Pro and Max versions to focus on getting the M7 series out quicker. In the most recent edition of the Power On newsletter, Gurman expands on his report, adding that the M7 should arrive in the first half of 2027, followed by the M7 Pro and M7 Max at the end of 2027 and an M7 Ultra in 2028. The reason for the change: AI, of course. But there's a surprising twist: It all goes back to the failed Apple Car project. In his June report, Gurman reported that the M7 will feature enhancements to the on-device AI processing capabilities. In his new report, Gurman details that Apple is able to move so adeptly with its AI hardware development because of the Apple Car project. In its attempts to build a self-driving car, Apple created components to handle the vehicle's AI processing. While the Apple Car project died, those AI components became the foundation for Apple's AI hardware. "Without that push," Gurman reported, "Apple would probably be even further behind in AI than it is today." The most recognizable development as a result of the Apple Car development is the Neural Engine in Apple silicon. It was introduced in the A11 Bionic chips used in the iPhone X in 2017-back then, Apple preferred the term "machine learning" instead of AI, but it's all the same. The Neural Engine has since become a key part of Apple's A-, S-, and M-series chips. With the dominance of AI in tech, the Neural Engine is now the focal point of Apple's chip development-it's the key to Apple's ability to perform on-device AI processing, a feature Apple believes is a differentiator between itself and its competitors. Compared to the cloud processing needed by other AI services, on-device AI processing offers faster performance, better security and privacy, and offline functionality.

The Apple Car may be dead, but it became the foundation of Apple Intelligence

A decade of work on a canceled car project reportedly laid the groundwork for Apple Intelligence. The Apple Car may have never left the garage, but it apparently gave birth to Apple's AI ambitions. According to Bloomberg's Mark Gurman, Apple's canceled autonomous vehicle project, one that consumed more than a decade of work and over $10 billion before being scrapped in 2024, ended up laying the technological foundation for Apple Intelligence. In a rather ironic twist, one of Apple's most expensive failures may also become one of its most important long-term investments. The Apple Car forced Apple to think like an AI company When Apple first began developing its self-driving vehicle, the goal wasn't simply to build an electric car. The company reportedly wanted Level 5 autonomous driving, the highest level of self-driving capability where a vehicle can operate entirely on its own without any human intervention. That ambitious target forced Apple to tackle one of the biggest engineering challenges imaginable: processing enormous AI workloads locally and in real time. To get there, engineers invested heavily in machine learning research and custom silicon designed specifically for AI processing. Although the dedicated chip intended for the car never made it into a finished product, the underlying work didn't go to waste. Instead, it evolved into the Neural Engine, Apple's dedicated AI processor that's now built into virtually every modern Apple chip. The first Neural Engine arrived inside the iPhone X in 2017, powering features such as Face ID and Animoji. Since then, Apple has steadily expanded the technology across its entire product lineup. Every Apple Silicon Mac launched since 2020 includes a Neural Engine, giving Macs dedicated hardware to run AI tasks locally instead of relying entirely on the cloud. Its influence goes well beyond the iPhone Bloomberg says the impact of the abandoned vehicle project stretches far beyond consumer devices. The same research reportedly influenced Apple's powerful Ultra-class Mac chips as well as the custom processors currently running Apple Intelligence servers. While Apple has struggled to deliver AI software features as quickly as rivals like Google and Microsoft, the company has spent more than a decade quietly building the hardware required to support them. Those early investments are now beginning to pay off as Apple continues expanding Apple Intelligence and rebuilding Siri around more capable AI models. That's perhaps the most fascinating part of the story. The Apple Car is often remembered as a spectacular failure because it never reached customers. Yet internally, Bloomberg suggests the project achieved something arguably more valuable: it accelerated Apple's expertise in AI hardware years before generative AI became the industry's biggest battleground. In hindsight, the company's abandoned vehicle may never transport people from one place to another. But the technology it inspired is already helping power Apple's next generation of AI experiences, and that might end up being the far more important destination.