How Apple Plans to Reduce Its Reliance on Nvidia for AI Workloads

Apple is reducing its dependence on Nvidia for AI workloads through a deliberate, multi-pronged strategy: it is looking to acquire AI chip startups, developing its own custom server chip (codenamed "Baltra"), expanding a key partnership with Broadcom to a deal worth more than $30 billion, and adding Intel as a U.S. manufacturing partner. These moves come as John Ternus, Apple's long-time hardware engineering chief, prepares to become CEO on September 1, 2026, with a "product-first" AI philosophy that sets Apple apart from rivals spending hundreds of billions on AI infrastructure.

Specific Steps Apple Is Taking

Acquiring AI chip companies – According to The Information (July 15, 2026), Apple is actively seeking to acquire AI chip companies to reduce dependence on Nvidia for its most demanding AI workloads. Apple currently handles some AI processing in its own data centers using its own chips, but still relies on Nvidia hardware hosted inside Google Cloud for advanced inference.

Developing custom AI server chips — Project Baltra – Apple has been working since late 2024 on a dedicated AI server chip codenamed "Baltra," developed in partnership with Broadcom. The chip is designed specifically for backend AI inference and is expected to enter mass production in the second half of 2026. Analyst Ming-Chi Kuo forecasts Apple will follow up by filling new AI data centers with these chips in 2027. An earlier internal project, "ACDC" (Apple Chips in Data Center), had been exploring server-grade silicon for years.

Expanding the Broadcom partnership to a $30B+ commitment – On July 7, 2026, Apple announced a new multiyear deal with Broadcom expected to exceed $30 billion, covering custom silicon components and wireless connectivity technology for a wide range of products. The deal extends through 2031 and will produce more than 1 billion U.S.-made chips.

Adding Intel as a U.S. manufacturing partner – In June 2026, Apple partnered with Intel to produce custom chips, a move tied to U.S. domestic semiconductor goals. Analysts note that advanced chips from this deal are still 2–3 years away from volume output, if they materialize at all.

Using Nvidia GPUs via Google Cloud in the interim – In a notable twist, Apple software chief Craig Federighi confirmed (June 2026) that Apple's advanced AI model "FM Cloud Pro" runs on Nvidia GPUs inside Google Cloud — effectively acknowledging that Apple's private infrastructure is not yet sufficient for its most demanding AI workloads.

How This Fits the Broader AI Arms Race

• Apple's approach is deliberately different from rivals. Rather than building giant GPU clusters of its own, Apple has historically minimized capital expenditure on AI infrastructure, buying compute from cloud partners instead. This frugal posture is now shifting into a more vertical-integration model.
• The broader industry is moving in the same direction: TrendForce projects custom ASIC shipments from cloud providers will grow 44.6% in 2026 vs. 16.1% for GPUs, as hyperscalers invest in their own silicon.
• Apple's in-house silicon advantage (M-series, A-series) gives it a unique foundation: it already runs AI inference for Apple Intelligence on-device using its own chips. The Baltra server chip extends this philosophy to the data center.

John Ternus's Incoming Leadership and AI Strategy

• John Ternus, Apple's longtime hardware engineering chief, was named CEO effective September 1, 2026, with Tim Cook becoming executive chairman. Apple also promoted silicon chief Johny Srouji to the newly created role of "chief hardware engineer," effectively making him Ternus's hardware successor.
• Ternus has articulated a "product-first" AI philosophy. In a recent interview, he stated: "We never think about shipping a technology" — instead, Apple asks how AI tools can serve users. This contrasts with Microsoft and Google, which have poured tens of billions into AI infrastructure and models.
• The challenge: Apple has been seen as trailing in AI, and Ternus must articulate a fuller AI strategy. His hardware expertise is viewed as an asset for Apple's silicon-driven AI push. The Baltra chip, Broadcom deal, and potential chip acquisitions are likely pillars of the revamped AI roadmap he will oversee.