Apple to Spend Billions on AI Servers to Train Language Models
Analyst Ming-Chi Kuo predicts Apple will spend $4.75 billion on AI servers in 2024 to build its own large language models. This massive investment highlights a race to catch up with competitors like Microsoft and Meta.
Apple is preparing to make a massive financial push into artificial intelligence by dramatically increasing its server spending. Analyst Ming-Chi Kuo expects the company to purchase up to 20,000 servers in 2024, bringing its total hardware investment to approximately $4.75 billion. This marks a significant jump from 2023, during which Apple buys between 2,000 and 3,000 servers for around $620 million.
The tech giant is purchasing high-end Nvidia HGX H100 8-GPU servers, which cost about $250,000 each, to train its generative AI models. Kuo notes that Apple insists on installing and using its own hardware rather than relying on third-party cloud providers to ensure maximum security and privacy. While Apple could eventually design its own server chips to reduce costs, Kuo finds no current evidence of such a project.
Despite this multibillion-dollar investment, Apple still lags behind competitors like Meta and Microsoft in the AI race. Kuo expresses genuine concern over reports that Apple is only spending $1 billion annually on AI development, arguing that the company needs to invest several billion dollars each year to catch up. These server purchases support Apple's ongoing efforts to create a smarter version of Siri and integrate advanced AI features across its application ecosystem.