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May 10Liked by Michael Parekh

Everyone in the world agrees with you but I still don’t get it. It was a genius move to design their own chips for their devices, so they could have tight integration and design and control their destiny. But cloud cycles are just a commodity. Granted that there’s a bubble at the moment and supply constraint. So it’s great Apple can maybe get to the front of the line producing these chips for their server but nothing to get massively excited about. They’ll save on giving NVIDIA and others some margin. Maybe they’ll get some economies of scale since they have a chip business anyway for their onboard device chips. Maybe their chips will be a little better or worse than other people’s cloud chips but it’s a foot race with lots of big players racing to put out better chips and sell them to both proprietary and generic cloud server farms. Ultimately I don’t see Apple having different cloud chips as a differentiator that will make any difference to what my watch and phone will do when I talk to them. Personally I think this is just an announcement of something they had in the works for years to keep us happy for another 6 months while they prep their on-board AI releases to catch up and maybe lead again in what really matters, which is the device I hold in my hand, on my wrist, on my head, and maybe someday in my head.

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There is a lot of specialization from Chip to Chip and cloud configurations do matter. Reason is that the exponential amount of matrix math calculations that will be needed with massive amounts of memory access in applications where teraflops and latency at every low processing costs make all the difference. Industry is years away from being a commodity.

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