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Apple’s Developer-Focused Cloud Initiative: Project ACDC

Apple is reportedly evaluating the launch of a cloud service tailored for developers, leveraging its proprietary silicon. This move could place Apple in direct competition with established players such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud. A comprehensive investigation by The Information’s Aaron Tilley reveals that this concept, internally known as Project ACDC (Apple Chips in Data Centres), was a significant topic of discussion within Apple throughout the first half of 2024.

The Cloud Market: Expansive, Profitable, and Competitive

Cloud infrastructure services form the backbone of the modern internet. As per Amazon’s earnings report, AWS alone generated $25 billion in revenue during Q1 2024. Meanwhile, Microsoft Azure and Google Cloud are also witnessing rapid growth, with Microsoft’s Intelligent Cloud segment achieving $26.7 billion in the same quarter.

These platforms empower businesses and developers to deploy applications, store data, and execute compute-heavy tasks such as AI training and inference without the need to manage physical servers.

Understanding Apple’s Project ACDC

As highlighted by MacRumors in 2024, Apple investigated the possibility of allowing developers to rent servers powered by its M-series chips, which are utilised in its Macs and iPads. These chips are designed on the Arm architecture, recognised for their energy efficiency and AI inference capabilities.

Apple has already integrated its own silicon in several data centres, particularly for its Private Cloud Compute infrastructure, which serves as a secure server-side backbone for its recently unveiled Apple Intelligence features. This system processes user data with privacy in mind while utilising Apple’s Neural Engine for large-scale inference.

The report also mentions that Apple tested these Mac chip-powered servers with the Siri team focusing on text-to-speech functionalities, before broadening their application to services like Apple Music, Photos, and Wallet.

Why Is Apple Contemplating This Market Entry?

1. Services Revenue Faces Scrutiny

Apple’s Services division generated $85.2 billion in FY2023, according to its annual report. However, increased regulatory scrutiny regarding App Store commissions in the EU and the United States, coupled with ongoing antitrust investigations concerning its $20 billion annual Google search agreement, pressurises Apple to broaden its revenue sources. A developer-centric cloud platform could serve as a new growth opportunity.

2. Maximising the Silicon Edge

Apple’s chip division stands out as one of its critical technological differentiators. If Apple can provide comparable or superior performance for cloud-based AI inference at lower energy and hardware expenditures, it presents a significant value proposition, especially amidst growing AI adoption.

3. Managing the Complete Stack

Apple’s strategy has consistently centred around controlling hardware, software, and services. A cloud offering powered by Apple Silicon would enhance the company’s end-to-end control over performance, privacy, and the developer experience.

What Could Apple’s Cloud Look Like?

No official announcement has been made, but based on current reports, a developer-centric Apple Cloud might offer:

• Seamless integration with tools such as Xcode, Swift, and Core ML
• Facilitation of deployment for on-device machine learning models on a large scale
• A more private, Apple-friendly alternative to third-party services like AWS
• Potential inclusion under the iCloud umbrella, albeit with a dedicated developer segment

Notably, Apple reportedly did not intend to establish a traditional enterprise sales division. Instead, its Developer Relations team was earmarked to oversee access, creating a more intuitive onboarding process compared to AWS or Azure.

Technical Focus: AI Inference Over Training

Apple’s M-series chips and Neural Engine are crafted for on-device inference, which entails executing pre-trained AI models to deliver real-time predictions or classifications. While entities such as OpenAI and Meta train extensive models using NVIDIA H100s or Google TPUs, the actual deployment of these models for applications like voice processing, object recognition, or smart replies can be efficiently managed by more optimised hardware.

Apple employs this technology for features including:

• Visual Look Up in Photos
• Siri’s on-device responses
• Language translation
• Personalisation in Apple Music and News

This makes Apple Silicon exceptionally suitable for cloud-based inference tasks, especially for applications that do not demand the vast scale or versatility of AWS’s entire GPU stack.

Will Apple Proceed with This Initiative?

The future of this initiative remains uncertain. Michael Abbott, Apple’s former VP of Cloud Engineering and a pivotal supporter of Project ACDC, departed the company in 2023. Although discussions reportedly extended into early 2024, the current state of the project is unclear.

Nonetheless, the internal use of Apple Silicon in its own infrastructure indicates that even if Apple opts not to release this as a public-facing service, it will continue to utilise this capability to enhance its offerings.

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