Apple (AAPL.US) is reportedly working with Broadcom (AVGO.US) to develop an internal AI chip.

Zhitong Finance learned that Apple (AAPL.US) is reportedly working with Broadcom (AVGO.US) to develop its first internal server chip specifically designed for artificial intelligence. The insiders revealed that the internal chip named Baltra may be ready for mass production before 2026. The media added that the new AI chip can be used for inference, which can process new data and then hand them over to large language models to generate outputs, a different task from training models. The chip will be manufactured by TSMC (TSM.US), possibly using its 3nm process, the sources said.

Julian Lin, head of Best Of Breed Growth Stocks investment group, said the potential partnership may be more beneficial to Broadcom than Apple as "Apple has historically had a lot of in-house technology." Lin added: "We may see the next predictable phase of the AI hype cycle: high profit always attracts competition."

According to previous reports, the plan accelerated after the ChatGPT chatbot from OpenAI swept the world in December 2022.

Apple CEO Tim Cook previously said that Apple has some advantages in the field of artificial intelligence that its competitors do not have. Cook said at the earnings call in May: "We believe in the transformative power and potential of artificial intelligence, and we believe that the advantages we have will set us apart in this new era, including Apple's unique seamless hardware, software, and services integration, groundbreaking Apple chips, industry-leading neural engines, and our strong focus on privacy, which are the foundation of everything we create."

Last week, Apple executive Benoit Dupin, in a rare acknowledgment of Amazon's custom AI chips, said Apple is evaluating Amazon's latest AI chip for pre-training models. Apple also uses some of its own chips to train Apple's AI models.

On Wednesday, Apple continued to roll out AI features. The tech giant released the latest versions of iOS, macOS, and iPadOS, which all contain some AI-related features, including integrating ChatGPT into Siri.