In a move that has caught many off guard, Apple (AAPL) has chosen Google’s (GOOGL) chips to train its AI models, steering clear of industry giant Nvidia (NVDA). A research paper published on Monday reveals Apple’s reliance on Google’s tensor processing units (TPUs) for key AI infrastructure components.
Breaking Away from the Pack
Apple’s decision to use Google’s chips over Nvidia’s is significant. Despite Nvidia holding roughly 80% of the AI processor market, Apple opted for Google’s TPUs. According to Reuters, Apple deployed 2,048 TPUv5p chips for AI models on devices like iPhones and 8,192 TPUv4 processors for its server AI model.
Why Google?
Google sells access to its TPUs through its Google Cloud Platform, requiring customers to build software through its cloud to use the chips. Apple’s engineers noted in the paper that they could create “even larger, more sophisticated models with Google’s chips.”
Silence from Key Players
Neither Apple nor Google commented on this revelation. Nvidia declined to comment as well. According to Yahoo Finance, Apple did not explicitly state that it avoided Nvidia chips, but its description of the AI tools’ hardware and software infrastructure notably lacked any mention of Nvidia components.
Is Apple Stock a Good Buy?
Apple is rolling out parts of Apple Intelligence to its beta users this week, adding unique AI features, including OpenAI’s ChatGPT, into its software. After this announcement, Apple’s stock got a nice little bump, showing that investors are pretty excited about Apple’s focus on AI tech.
Analysts remain cautiously optimistic about AAPL stock, with a Moderate Buy consensus rating based on 25 Buys, nine Holds, and one Sell. The average AAPL price target of $240.61 implies an upside potential of 10.25% from current levels.
