Apple is not known for spending big on acquisitions. But that reputation may be about to change. The company is reportedly in talks with semiconductor makers and bankers about buying chip companies to boost its AI server infrastructure, according to Engadget.
The push comes after Apple ran into performance problems with its M2 Ultra-powered servers. Those chips handle some AI tasks, but the heavy lifting, including the Gemini model running behind Siri AI, appears to rely on NVIDIA chips hosted on Google Cloud. Apple reportedly tried shifting more of that workload to its own infrastructure, but the results weren’t good enough.
This matters because Apple has spent years positioning itself as a company that controls its own silicon destiny. It makes some of the most powerful chips in the consumer market. But server-grade AI chips are a different challenge, and right now, Apple is playing catch-up.
The timeline on Apple’s server chip roadmap is also slipping. Bloomberg reported this week that a server chip based on the M7 Ultra won’t arrive until 2029. Apple is expected to upgrade its infrastructure with M5 Ultra chips in the near term, but a next-generation server chip internally codenamed “Baltra” was originally planned for this year and has been pushed back.
To fill the gap, Apple has been moving fast on deals. Last week, it agreed to buy $30 billion worth of chips from Broadcom, specifically chips made in the US. That deal signals Apple is serious about its server ambitions, even if its own chip designs aren’t ready yet.
Buying an AI chip company outright would be a significant move for Apple. Its acquisition history puts the scale into perspective:
- It paid $278 million for PA Semi in 2008, the deal that started its in-house chip program
- It spent $3 billion on Beats in 2014, its largest acquisition to date
- It recently bought AI startup Q.ai for nearly $2 billion, its second biggest deal ever
AI chip companies won’t come cheap. Demand for that kind of hardware is at an all-time high, and any seller knows it. But Apple has the resources to move if it wants to. At the end of March, it had $45.6 billion in cash and cash equivalents on hand.
The broader picture here is one of Big Tech racing to own as much of the AI supply chain as possible. Microsoft, Google, and Amazon have all invested heavily in custom AI chips. Apple is late to that part of the race, and acquiring a chip company would be the fastest way to close the distance.
