Apple Extends Broadcom Deal to 2031 for AI Server Chips
AI server chip Baltra reveals Apple's reliance on Broadcom's ASIC expertise
Apple has extended its custom chip partnership with Broadcom through 2031, signaling that even as Apple brings more hardware in-house, it still needs outside help for AI. The deal covers custom ASIC chips that accelerate AI workloads and support specialized computing. Meanwhile, Apple is developing its own AI server chip codenamed Baltra, a supersized version of the M5 Ultra, expected by 2027 for training AI models and running Siri inference. This chip could also appear in the Mac Studio, but not in iPhones or iPads due to power constraints.
The partnership comes amid surging AI demand that is reshaping the component market. Broadcom, a longtime Apple supplier for connectivity chips, has also recently partnered with OpenAI for custom chips in the Stargate data center. Industry-wide, component makers are locking in multi-year contracts and raising prices — top-end components have increased over 100% in the past year. For Apple, this has already led to higher device prices across most of its portfolio. The extended Broadcom deal ensures supply stability but also reflects the broader trend of AI driving up costs and forcing longer-term planning for hardware suppliers.
- Apple and Broadcom extended their custom chip partnership through 2031, focusing on AI-accelerating ASICs.
- Apple's AI server chip, coded Baltra (based on M5 Ultra), is slated for 2027 to power Siri and AI training.
- Rising AI demand has led component makers to enforce multi-year contracts and price hikes, raising device costs across the industry.
Why It Matters
AI hardware demand forces even Apple to rely on partners like Broadcom, raising device costs and altering supply chain strategies.