Report: Apple seeks to acquire chip companies to strengthen AI server capabilities

Tech giant Apple is reportedly in pursuit of chip companies as it aims to bolster its capabilities in developing processors for artificial intelligence servers. The company has initiated contact with several chip startups to gauge their interest in acquisition and is engaging in discussions with investment banks regarding potential transactions.

This strategic move comes as Apple's in-house M2 Ultra chips, currently used in its AI servers, have encountered performance hurdles. The Information, citing sources familiar with the matter, reported that Apple's plans to launch its next-generation AI server chip, codenamed Baltra, have been postponed.

Further complicating matters, Apple's earlier attempts to run Google's Gemini large language model on its internal servers for a Siri upgrade reportedly fell short of performance expectations. Consequently, the company opted to utilize Google Cloud's AI infrastructure instead.

Apple, known for its infrequent large-scale acquisitions, recently acquired Israeli AI startup Q.ai in January. As of March 28, the company held approximately $45.57 billion in cash and cash equivalents. In a separate development, Apple recently finalized a multi-year supply agreement worth over $30 billion with Broadcom, signaling an expansion of its chip procurement within the United States.