November 30, 2023

After a report mentioned Apple was planning to announce generative AI options later subsequent yr with iOS 18, analyst Ming-Chi Kuo is corroborating that with the doable prices and the way Apple is attempting to meet up with different tech firms.

Final week, Haitong Worldwide Securities analyst Jeff Pu mentioned iOS 18 might lastly add generative AI options for the iPhone in late 2024. He urged Apple is constructing a number of hundred AI servers in 2023 and much more in 2024. By combining cloud-based AI and on-device information processing, Apple would lastly roll out its generative AI to iPhone and iPad customers by late 2024.

Now, in accordance with Ming-Chi Kuo, Apple is planning to buy 2,000–3,000 and 18,000–20,000 models of AI servers in 2023 and 2024, respectively, which represents 1.3% and 5% of worldwide AI server shipments in 2023 and 2024.

For Apple to announce its generative AI function, the corporate will buy Nvidia’s HGX H100 8-GPU, designed for generative AI coaching and inference. It’s additionally anticipated that some shipments in 4Q24 will probably improve to the B100 answer.

Since these GPUs are priced at round $250,000, Apple will spend “a minimum of” $620 million in 2023 and $4.75 billion in 2024 on AI server purchases.

Kuo says that Apple’s purchases of AI servers are considerably decrease in 2023 than in 2024 resulting from a scarcity of Nvidia AI chips. Nonetheless, even when the provision of Nvidia AI chips improves in 2024, Apple’s AI server purchases nonetheless lag behind its rivals. “Taking Meta for instance, its AI server buy in 2024 will likely be about 40,000 models. To not point out, Meta’s AI server depend earlier than 2024 already far exceeds that of Apple,” compares the analyst.

Kuo means that when Apple trains its giant language fashions, it’ll probably want to make use of AI servers it has bought and put in itself fairly than digital hosts from different cloud service suppliers for safety, privateness, and design flexibility, which implies the corporate should supply superior software program improvement capabilities to meet up with the opposite tech companies.

Lastly, he additionally says that these estimates don’t think about labor prices, infrastructure working prices, and so forth., which implies Apple will really want to take a position far more to get a correct outcome if it desires to launch generative AI options by late 2024.