Secret Apple 'Project ACDC' to pioneer AI chips for data centers

Under the internal name "Project ACDC," Apple is developing Apple Silicon designed specifically for server farms dedicated to AI processing. The company aims to optimize AI applications within its data centers for future versions of its platforms.

Apple has been a leader in designing proprietary chips for its devices, including iPhones, iPads, Apple Watches, and Mac computers. The shift towards creating server-specific AI chips is a natural extension of its expertise, as reported by The Wall Street Journal.

The company has hinted at revealing new AI products and advancements at its upcoming Worldwide Developer Conference in June. For example, the next version of Safari may feature user interface enhancements, improved content blocking capabilities, and an innovative AI-driven feature called Intelligent Search.

Siri is set to get a similar upgrade, sources indicate, as Apple plans to enhance integration with its Messages app. In upcoming versions of Apple's operating systems, the company's AI may analyze message content to generate summaries.

The actions of rivals like Microsoft and Meta have heightened the urgency of developing these AI capabilities. These companies have rapidly oriented their operations around generative AI following the public impact of OpenAI's ChatGPT.

Microsoft, in particular, has benefited from its early and close partnership with OpenAI, recently surpassing Apple as the world's most valuable company.

There is a growing impatience among Apple investors, driven by perceptions of the company lagging behind its competitors in AI innovation. However, the potential impact of Apple's AI advancements on its market valuation can't be overlooked.

Apple's move comes when AI technology becomes pivotal in corporate strategies across various industries. As companies like Amazon, Google, and others also intensify their focus on AI, the technology's role in business continues to evolve, touching everything from cloud computing to consumer electronics.

Apple's moves into AI territory

Apple is significantly increasing its investment in the artificial intelligence sector, planning to allocate over $5 billion to AI server enhancements over the next two years. The company aims to match the technological capabilities of industry leaders like Microsoft and Meta by acquiring tens of thousands of AI server units.

TSMC is advancing the development of 3-nanometer processors, with Apple reportedly securing the entire production capacity for these chips. Initially, it was assumed that Apple would utilize this technology for the newest iterations of its A-series chips in iPhones and M-series chips in Macs.

However, recent revelations from a leaker known as "Phone Chip Expert" on the Chinese social media platform Weibo suggest that Apple is actively working on a specialized artificial intelligence processor. According to the source, mass production of this AI chip is expected to commence in the latter half of 2025.

Apple's strategy includes owning and operating its own hardware for better security and design flexibility, differentiating it from competitors who may rely on cloud-based services.

Additionally, the next-generation M4 and A18 chips are expected to feature significantly upgraded neural engines. These enhancements are designed to bolster AI functionalities in devices running iOS 18, and they may appear in the iPad event on Tuesday.