Apple Pursues Acquisition of Semiconductor Startups with Goal to Replace Nvidia Chips

"Proprietary AI Chip Expected to Launch in 2029"
Chinese Authorities Approve Release of Apple Intelligence

Reuters Yonhap News

Apple is embarking on the development of its own artificial intelligence (AI) server chips by acquiring semiconductor startups. The company plans to produce custom chips tailored to its servers, aiming to reduce its dependence on Nvidia. Apple also achieved success in launching its AI services in China, which had previously been hindered by Chinese regulatory authorities. As Apple's progress is expected in the AI sector, where it had been considered a latecomer compared to Google and OpenAI, the company's share price rose.

On July 15 (local time), U.S. IT media outlet The Information reported, citing multiple sources, that "Apple is considering acquiring semiconductor startups to develop proprietary AI server chips and is in discussions with investment banks." The report added, "Apple has also probed some startups regarding their willingness to sell." It further stated, "Apple had initially planned to release its next-generation server chip, codenamed 'Valtra,' within this year, but the schedule has been delayed."

Previously, Apple attempted to operate AI models with its self-developed 'M2 Ultra' chip but was unsuccessful. Since then, the company has used Nvidia chips for high-performance tasks, yet it has not given up on developing its own chips. Earlier this year, Apple acquired the Israeli startup Q.ai for $2 billion (approximately 3 trillion won) to speed up chip development.

It is known that Apple has significantly revised its existing semiconductor development plans to develop high-performance AI server chips. According to Bloomberg, "Apple has successively developed its own chips from the M1 to the M5, releasing high-end models divided into 'Pro' and 'Max' versions. However, for the M6 currently in the works, Apple decided to only produce a basic version without a high-end model." Bloomberg added, "Apple is aiming to accelerate the launch of the M7 Ultra chip, which is specialized for AI computation, though the release is likely possible only in 2029."

As Apple has begun developing high-performance AI chips in earnest, the Chinese government has approved the market entry of Apple’s AI services. According to CNBC, the Cyberspace Administration of China (CAC) approved the launch of Apple's AI service 'Apple Intelligence' in the Chinese market on this day. Apple was included in the list of newly approved operators along with AI services released by Huawei and Xiaomi.

The Chinese market, alongside the U.S., is the largest AI services market in the world. However, amid the ongoing battle for AI supremacy between the U.S. and China, entry into the Chinese market by big U.S. technology companies had been virtually impossible. Although Apple Intelligence was released in 2024, it is only now able to enter the Chinese market. However, Apple was able to secure approval from Chinese authorities by collaborating with local companies such as Alibaba and Baidu. In the Chinese market, Apple Intelligence will operate in conjunction with Alibaba’s Qwen and Baidu’s search service.

Tim Cook, Apple’s Chief Executive Officer who is set to step down soon, has actively worked to secure approval from Chinese authorities, including personally accompanying U.S. President Donald Trump’s economic delegation during his visit to China this past May. Cook will hand over the CEO position to John Turners this September, but will continue to interact with policymakers around the world as Chair of the Board.

On the news of Apple’s in-house chip development and entry into the Chinese market, the company’s shares rose. On this day at the New York Stock Exchange, Apple’s stock closed at $327.50, up 4.01% from the previous session.

This content was produced with the assistance of AI translation services.