Apple may be preparing to sell AI servers again, but the more surprising part of the reported plan is whose technology could help connect them.
The Information reported on September 16 that Apple Inc. (NASDAQ:AAPL) is developing enterprise servers around future M8 Ultra processors. Designs under consideration use either two or four M8 Ultra chips, with a possible 2029 launch aimed primarily at AI inference. Apple has also considered NVIDIA Corporation’s (NASDAQ:NVDA) NVLink Fusion technology to connect those processors.
Neither the server nor Nvidia’s involvement is finalized. The project could still change or disappear entirely. Yet the architecture being discussed reveals an important shift in AI hardware economics.
Nvidia wants to get paid even when the GPU is not Nvidia’s
NVLink originally helped Nvidia GPUs communicate at high speed inside increasingly large AI systems. NVLink Fusion extends that strategy to custom CPUs and accelerators made by other companies.
For NVIDIA Corporation (NASDAQ:NVDA), that creates a second line of defense around its AI franchise. Apple could theoretically compete with Nvidia compute using its own processors while still buying Nvidia switches, connectivity chiplets and software. The Information reported that networking equipment can represent 10% to 15% of AI data-center hardware costs, giving Nvidia a meaningful revenue pool beyond GPUs.
The bearish interpretation is just as important. If more customers build capable proprietary accelerators, Nvidia may capture networking revenue while losing higher-value compute sales. NVLink Fusion is partly a way to monetize an increasingly heterogeneous market.
Apple Inc. (NASDAQ:AAPL) gains something different. Its M-series chips already combine performance with relatively efficient power consumption, and selling complete servers would let Apple pursue AI developers, governments and businesses that want local inference. But a 2029 target leaves years for competitors to improve, and Apple would be re-entering a server business it abandoned when Xserve disappeared in 2011.
Funds like both stocks, but Nvidia gained ground
Insider Monkey tracked 169 hedge funds holding Apple in Q2, versus 170 in Q1. Arrowstreet Capital increased its position 54% to roughly 29.9 million shares. Nvidia rose to 285 hedge-fund holders from 275, while Arrowstreet increased its NVDA stake 10% to about 34.7 million shares.
Apple’s August 31 short interest stood near 139.7 million shares, roughly 1% of float and 3.5 days of trading volume.