Apple is reportedly working on its first custom server chip, designed specifically to handle artificial intelligence (AI) applications, in collaboration with semiconductor company Broadcom. According to sources familiar with the project, the chip, internally code-named Baltra, is expected to be completed within the next 12 months.

This move marks a significant expansion of Apple's chip design capabilities, which have primarily focused on developing Apple Silicon for its devices. While Apple's existing chips have been optimized for power efficiency and performance, they were not specifically designed to handle the intense computational demands of AI processing.

The need for a custom AI server chip arises from Apple's growing ambitions in the AI space. The company recently rolled out several AI-powered features, including ChatGPT integration, to users with newer iPhones and Macs. However, certain tasks, such as Siri and Maps, are handled in the cloud and require significant computing resources. As Apple plans to introduce more generative AI features in the coming years, the demand for powerful AI processing capabilities will only increase.

The Baltra chip is expected to play a critical role in supporting these AI workloads, with a focus on advanced networking technology to facilitate seamless connections between devices and networks for AI processing. This is where Broadcom's expertise comes into play, as the company is known for its high-performance networking solutions.

By developing its own custom AI server chip, Apple aims to gain greater control over the underlying technology and improve the performance and efficiency of its AI applications. This move is likely to have significant implications for the tech industry, as Apple's influence and market presence could drive further innovation and adoption of AI technologies.

As Apple continues to push the boundaries of AI capabilities, its partnership with Broadcom on the Baltra chip represents a critical step towards realizing its AI ambitions. With the chip's expected completion within the next year, Apple is poised to make significant strides in the AI space, and the industry will be watching closely to see how this development unfolds.