In recent years, Apple has actively revised its hardware strategy to reduce its reliance on third-party manufacturers. One of the most significant moves in this direction was the company’s intention to completely sever ties with Nvidia, a supplier of graphics processors and AI accelerators. As part of this strategy, Apple has ramped up its research and development efforts to create its own AI accelerators.
The relationship between Apple and Nvidia dates back to the early 2000s, when Nvidia graphics cards were first introduced in Mac computers. However, even then, tensions between the companies were evident. Steve Jobs, then CEO of Apple, had openly expressed skepticism about Nvidia’s technology, alleging possible loans from the animation studio Pixar. According to The informationNvidia’s chief executive denied the accusation, but Jobs ignored the denial throughout the meeting. Nvidia, for its part, has also found working with Apple difficult, viewing the company as too demanding for a customer that doesn’t consistently rank among its top ten customers. Over the years, disagreements persisted, with Apple expressing concerns that Nvidia’s energy-inefficient graphics cards produced significant heat, particularly problematic for mobile solutions.
Despite Nvidia’s dominance in the AI accelerator market, holding a 70-95% share in recent years, Apple has chosen to abandon its reliance on the company. It’s worth noting that until recently, Nvidia hardware was vital to various functions of Apple’s AI project platform. However, Apple recognized the importance of developing internal solutions to eliminate dependence on external partners. Interestingly, Apple did not purchase the Nvidia hardware directly, but rather accessed it through Amazon and Microsoft’s cloud services. There are reports that this deal may not go ahead as Apple has hired Broadcom to work on developing its own AI accelerator.
Since the introduction of the M1 chip in November 2020, Apple’s first in-house processor for its Mac series, Apple has demonstrated its willingness to take bold steps. The move has already led to a breakup with Intel, which was historically Apple’s main processor supplier. Since then, Apple has continued its push toward full autonomy, exploring the creation of its own AI accelerators to replace Nvidia’s technology.
Nvidia is one of the leading GPU manufacturers and many Apple products, especially in the MAC and gaming segment, depend on Nvidia’s performance. If Apple decides to end its collaboration with Nvidia, it could impact the performance of its devices, potentially reducing consumer demand for its products.
However, if Apple can develop alternative solutions or leverage its technology, it could mitigate these risks. This change, akin to automating stock market trading or using a stock screener to identify undervalued opportunities, requires significant time and resources.
Apple plans to launch new AI accelerators, named Baltra, in 2026. These accelerators are expected to be produced at TSMC facilities using cutting-edge N3P process technology. Notably, this same process will debut on the iPhone 17 Pro, highlighting its importance for Apple’s future devices.
The potential breakup with Nvidia could also raise concerns among investors, which could impact Apple’s stock price if it is seen as a sign of innovation or strategy problems. Apple stock is closely watched by investors and regularly appears on stock screeners for its strong fundamentals and market influence. A poorly managed transition out of Nvidia could dampen investor confidence, while a successful move could boost confidence in Apple’s vision and send its stock higher.
The end of the partnership between Apple and Nvidia could have considerable implications for the AI and graphics solutions markets. By striving for complete independence, Apple is taking a decisive step toward self-sufficiency and innovation, paving the way for changes that will reshape not only its business but the entire technology industry.
