Apple aims to cut Nvidia reliance with Broadcom partnership on AI chip: Report | Mint-OxBig News Network

Apple is reportedly working with Broadcom to create its first server chip designed specifically for artificial intelligence (AI) processing. According to sources cited byThe Information, the new chip is internally code-namedBaltra and is anticipated to enter mass production by 2026.

Reportedly, the move aligns Apple with major technology firms such as Google, which have developed bespoke chips to power AI-driven services. By doing so, Apple aims to reduce its reliance on Nvidia’s high-cost and often scarce processors.

To manufacture the chip, Apple is set to utilise one of Taiwan Semiconductor Manufacturing Co’s (TSMC) advanced fabrication processes, known as N3P. The collaboration marks a strategic shift as Apple continues to enhance its AI capabilities across devices and services.

Broadcom shares surged five per cent following the news. The company has already benefitted significantly from the generative AI boom, with its share value increasing by 54 per cent in 2024 after nearly doubling the previous year.

Apple’s partnership with Broadcom is not its first. Last year, the two companies signed a multi-billion-dollar agreement to develop 5G radio frequency components. Earlier this year, Apple announced at its Worldwide Developers Conference that it intended to use its own server chips to power AI features on its devices.

According to the report, Apple has seen considerable success in chip development, with its M-series processors replacing Intel chips in Mac computers. However, despite in-house advancements, firms like Apple and Microsoft have found it challenging to fully break away from Nvidia, which remains a key player in the AI chip market. Google, which also collaborates with Broadcom for AI chips, is a notable exception.

Broadcom’s primary competitor in this sector, Marvell, has estimated that the custom chip market could expand to around $45 billion by 2028, with the two firms likely sharing the market.

(With inputs from Reuters)