Apple to spend $4.75 billion on AI servers next year as it desperately tries to catch up with rivals

A picture of servers
(Image credit: Getty Images / Sinology)

A new report has revealed that despite plans to spend nearly $5 billion on AI servers next year, Apple is still struggling to keep up with its rivals.

Reputable industry analyst Ming-Chi Kuo has put up a Medium post, revealing that their recent study showed Apple buying 2,000-3,000 units of AI servers in 2023, with that number pushing up to 18,000-20,000 in 2024. This is a sizable jump from before but pales in comparison to the 40,000 Meta is buying and the 80,000-100,000 Microsoft is reportedly purchasing. 

Apple’s growth in the industry is partially due to an Nvidia AI chip shortage and also partially down to Apple’s unwillingness to previously commit to the tech in a fashion similar to its major competitors.

Falling behind — iMore's take

In a recent Bloomberg article discussing the rise of AI funding across the industry, someone close to Apple revealed to Mark Gurman “There’s a lot of anxiety about this and it’s considered a pretty big miss internally”. In an effort to catch up, Apple is set to spend billions of dollars on both its infrastructure and development, though this leaves Apple executives with a handful of important questions. 

Running AI computing on-device means that using apps offline gives you the ability to create templates quickly in writing and presentation apps without as much reliance on those servers, but it develops much slower as AI gets better based on information you feed it. If you cut off your ability to send information back to servers, it has less to work off. 

We know some level of cloud computing will exist here, but the advancement of the Neural Engine in both the iPhone 15 Pro and Apple Watch Series 9 means on-device Siri is getting better. Apple will have to decide where it wants to dedicate its resources, and not focusing on AI quicker gives it less time to make this decision. Hopefully, that exponential funding will set them on the right path. 

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James Bentley

James is a staff writer and general Jack of all trades at iMore. With news, features, reviews, and guides under his belt, he has always liked Apple for its unique branding and distinctive style. Originally buying a Macbook for music and video production, he has since gone on to join the Apple ecosystem with as many devices as he can fit on his person. 

With a degree in Law and Media and being a little too young to move onto the next step of his law career, James started writing from his bedroom about games, movies, tech, and anything else he could think of. Within months, this turned into a fully-fledged career as a freelance journalist. Before joining iMore, he was a staff writer at Gfinity and saw himself published at sites like TechRadar, NME, and Eurogamer. 

As his extensive portfolio implies, James was predominantly a games journalist before joining iMore and brings with him a unique perspective on Apple itself. When not working, he is trying to catch up with the movies and albums of the year, as well as finally finishing the Yakuza series. If you like Midwest emo music or pretentious indie games that will make you cry, he’ll talk your ear off.