Apple is known for designing custom silicon for its iPhone and Mac models. The Cupertino-based company now seems to be preparing for a broader push to expand its AI processing power by acquiring AI chip companies. Apple is said to have approached investment bankers and several chip makers to assess their interest in a possible acquisition. The iPhone maker, meanwhile, is said to be working on a new next-generation AI server chip. Earlier this year, Apple made a deal with an Israeli AI audio startup.

Apple Considers Chip Startup Buyouts

The Information, citing unnamed sources, reports that Apple has approached several semiconductor startups to assess their interest in a potential acquisition. The company also reportedly had discussions with investment bankers about possible deals.

Apple's interest in acquiring chip startups reportedly comes as it faces challenges with the performance of its in-house AI servers, which currently rely on its custom-designed M2 Ultra chips. The company earlier reportedly planned to launch the next-generation chip codenamed Baltra this year, but the project has been reportedly delayed. Currently, more demanding tasks are handled by Gemini-powered Siri, which runs on Google Cloud's Nvidia GPUs.

Acquisition of AI chip companies is expected to mark a shift from Apple's previous pattern of buying small startups. Back in 2014, the brand acquired Beats for $3 billion. Apple purchased Intel's smartphone modem division in 2019. In January this year, Apple acquired an Israeli AI startup, Q.ai, for close to $2 billion. Apple is rumored to be in talks with PrismML.

All of this comes as Apple is gearing up for a major leadership transition in the coming months. Senior Vice President of Hardware Engineering John Ternus is set to replace Tim Cook as CEO on September 1. The changes also coincide with Apple's new legal action against OpenAI. Last week, the Cupertino-based company reportedly filed a lawsuit against OpenAI, alleging that it misappropriated Apple's intellectual property.