Tuesday, May 21, 2024
HomenewsApple estimated to spend US$4.75 billion on AI server purchases in 2024

Apple estimated to spend US$4.75 billion on AI server purchases in 2024

Apple estimated to spend US$4.75 billion on AI server purchases in 2024

Apple is said to be purchasing a huge number of AI servers next year.

According to analyst Ming-Chi Kuo, Apple is estimated to purchase between 18,000 to 20,000 units of AI servers in 2024 which constitutes about 1.5% of global AI server shipments next year.

Kuo says the AI servers are likely powered by NVIDIA's HGX H100 8-GPU for generative AI training and inference. Towards the end of 2024, Apple is likely to upgrade to NVIDIA's B100 solution for the AI servers.

Since the HGX H100 8-GPU costs about $250,000, Kuo estimates that Apple will spend at least $4.75 billion on AI server purchases next year.

To put this figure into perspective, Apple spent $22.61 billion for the fiscal year 2023 on R&D. This means Apple will spend about 21% of last year's total R&D spend solely on AI servers, which is significant, to say the least. This figure also excludeslabourand infrastructure operating costs.

Kuo believes Apple prefers to train its language models on its own AI servers than rely on other cloud service providers as it prioritises security, privacy and design flexibility.

A Bloomberg report in July suggests that Apple has developed an "Ajax" framework for large language models, and is testing an internal chatbot that employees referred to as"Apple GPT". The company is also reportedly using Foxconn servers to test its AI services.

Despite the huge investment, Kuo claims Apple is still behind the competition. Kuo states that Meta will purchase 40,000 AI servers next year while Microsoft will buy around 80,000 to 100,000 units.

While superior software development capabilities can help Apple narrow the gap with its rivals, we have not seen any comparable AI-based features or technologies from the iPhone maker.

Kuo reported two months ago that Apple is significantly behind its competitors in generative AI and"there is no sign that Apple will integrate AI edge computing and hardware products in 2024."

The estimated expenditure figures and forecast from Kuo differ from Bloomberg, which recently reported that Apple is on track to spend $1 billion per year on AI efforts. In addition, Bloomberg states that a new, smarter version of Siri is in the pipeline and Apple plans to integrate AI into more of its apps.

Source: Ming-Chi Kuo via MacRumors

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