Colin’s Note: With all the buzz surrounding artificial intelligence, there’s one tech giant that’s been noticeably absent from the AI headlines…
And that’s Apple.
But just because it’s stuck playing catch-up behind its competitors doesn’t mean it’s out of the AI race.
Next month, the company is expected to present at its annual Worldwide Developers Conference – WWDC 2024. There, Apple will unveil its new AI feature.
And behind Apple’s new AI is a bold strategy that, if it can pull it off, could see it find its footing among the other big tech companies that have led the AI boom… and shake up the industry as a whole.
I get into it all in today’s issue. Just click below to watch…
After being absent from nearly all of the artificial intelligence (AI) news over the past year, Apple is expected to make news at one of its largest events starting next month.
Instead of presenting as a leader in AI, Apple will largely be playing catch-up with features already found in Google and Samsung devices.
But that doesn’t mean Apple has been left behind.
In fact, the company is planning a bold strategy. I’ll tell you all about today… And if it works out, it will have a massive impact on virtually every tech stock in the market.
What is going on investors? Hopefully, you guys are doing well. Welcome back to The Bleeding Edge.
With Apple’s Worldwide Developer Conference set to kick off early next month, the tech industry awaits what one of the world’s largest companies has in store. But it’s what Apple hasn’t done over the past year that has most people talking.
While most tech giants have been gobbling up Nvidia GPUs as fast as Nvidia has been able to make and sell them, Apple is rumored to have hardly purchased any of Nvidia’s coveted GPUs. Most industry data doesn’t even show Apple as a top-ten Nvidia customer.
This is remarkable considering how important AI could be to Apple in the future. That means Apple has chosen to go an entirely different path than anyone in the industry.
Apple is going to rely on its custom computer chips to power most of its AI ambitions… at least in the near future.
Now, custom AI data center chips are nothing new. Google has been investing in its own tensor processing units (TPUs), along with Broadcom, for many years now. Virtually every major tech company from Amazon to Microsoft to Meta has something similar running in their data centers.
But Apple is doing something we’ve never seen before.
Instead of relying on powerful Nvidia GPUs – which can often cost upwards of $20,000 – Apple will power its AI features using a computer chip found in their computers that was released in 2023.
Apple’s M2 Ultra computer chip was first introduced in June 2023. The high-end chip is coveted by professionals who want the ultimate in performance that Apple computers can deliver.
But Apple believes the chip can do more than just serve the high-end consumer market.
That’s why Apple has quietly ramped up production of this powerful chip to record levels in recent months. But how can a computer chip found in a $4,000 Macintosh computer compete with a $20,000 GPU found in the world’s most advanced data centers?
Well, the truth is, it can’t.
The Apple M2 Ultra computer chip is truly one of the best in the world found in a personal computer. But comparing it to an Nvidia GPU is like comparing a Honda Civic to a Ferrari… in a head-to-head competition.
Given that the M2 Ultra chip has been in production for nearly a year, it’s likely Apple can manufacture these in large volumes.
More importantly, Apple is set to announce its AI feature next month at WWDC 2024. And what it does… these aren’t exactly compute-intensive tasks.
The AI will be summarizing notifications from your social media… or suggesting replies to emails and text messages. These are tasks that can be managed by most computer chips Apple already has installed in most devices.
For tasks that require the use of the cloud, it’s likely Apple’s M2 Ultra chip is capable of executing most tasks consumers like you and I encounter on our phones.
For more advanced AI workloads – like the ones we see on Microsoft Copilot or in chatbots – Apple will partner with OpenAI, Google, and Anthropic.
This explains why Nvidia’s outlook was so strong last week. As the advanced AI providers, they’ll be busy beefing up their AI data centers in anticipation of hundreds of millions of Apple users trying out the new AI features here in the coming months.
But with a hybrid approach of using existing computer chips and partnering with more advanced AI companies, Apple is set to re-accelerate the AI industry in the coming months.
And if Apple can prove it can handle existing AI workloads on a computer chip that costs less than a few thousand dollars, it could completely shake up an industry that has been reliant on Nvidia for virtually everything related to AI.
That was The Bleeding Edge for today. I’ll be back later this week. See you then.