Will Apple avoid giving their cash flow to Nvidia?
by Horace Dediu
Asked by Jay Goldberg
Q: Do you think Apple will start investing heavily in AI data centers?
There's rumors and actually statements from Apple saying that they're working on a server chip. Google has a server chip. Amazon's got a server chip. These are effectively aimed at Nvidia. And if you can make something, you tend to do it. Now, of course, there's some protection — Nvidia's got other special sauce, but their margin is everybody's opportunity. They have a huge margin. And everybody's writing huge checks. As I say, hyperscalers are just handing over their entire cash flows to Nvidia. And that means their shareholders' entire wealth is being handed off to Nvidia shareholders. So there's a transfer of wealth happening right now. Presumably, because we're going to get some benefit later, but if that's happening and people are irritated by it, they're going to find a way to do what Nvidia does.
And Apple, of course, can and will do that. Now, whether that'll get deployed at the edge or in Apple's own cloud — because they probably also don't want to write checks to Nvidia, and they'll say, well, we can do it, and we won't necessarily sell them, like Google wants to. They'll probably just use them themselves. And that's something certainly they're capable of.
The question I was always asking is how many are we talking about? Because if it's in the tens of millions, or even single-digit millions — for Apple, single digits. Is it worth it to develop your own designs? There's a limit to how many you can deploy. And probably you're going to have to replace them every so often, so there's a question about how much it costs to keep on the treadmill.
But it is an interesting question, and I think everybody's capable of doing what Nvidia's doing. But it's about execution, timing, delays. Look at what happened with the Qualcomm chip — how long it took Apple to finally deploy the communications chip relative to the amount of grief it had to deal with. First, of course, it moved out of Intel. It moved out of Qualcomm now, and now the question is, is it going to move out of the server supplier chain? And that's a complex decision. But again, Apple's not doing it because they want to be in that business. It's more that they want to avoid dependency.
This was one of the questions asked by the participants in Asymco's May 2026 Office Hours live Q&A sessions, open to Asymco One subscribers.
See also: May 2026 Office Hours
3 comments
Sacto Joe ·
“It’s more that they want to avoid dependency.” I 100% agree. Apple doesn’t have a problem “partnering up”, but as the whole Google Maps fiasco made clear, it will refuse to be screwed over. And it has the cash flow to make that happen.
That’s why the Apple/Nvidia spatial computing deal is so fascinating. Apple comes to the table with a lot: The Vision Pro, unmatched and nearly unmatchable capability in production of highest quality computer hardware, the M-series chips, and both Cloud-and-device-based personal privacy protection.
The fruits of that potential partnership are, simply, mind-boggling. The issue, of course, is going to revolve around just how dependent one is on the other. And Apple having been burned many times, up to and including by Microsoft, would do well to be wary, and explore the possibility of “growing their own”, and leaving everyone else to Nvidia.
Just my 2 cent’s worth…
FredHS ·
Great points, Joseph and Horace.
Apple's relentless focus gives them the edge, pun intended. Cloud dilutes that focus.
The Nvidia partnership cost Apple nothing, because as Nvidia's Max Bickley, Omniverse Product Manager said, paraphrasing; no other MR device has what AVP has, mainly an M-series processor. Max can't deliver his vision (sorry another pun) with any other partner.
This validates Apple's day one focus on the end-user, the 'fat client' vs. 'thin client' approach. Max also cited the privacy aspects of partnering with Apple.
Net: Apple gave up no cash. They did give Nvidia collaboration.
rbgayle ·
The Nvidia-Apple interaction is really intriguing. Apple has a novel organizational structure that I believe makes it very adaptable and resilient. I worked at a biotech compnay with a similar structure - low hierarchy, few silos/fiefdoms. groups defined by technology, not by product, management based on expertise, lots of vetting of idea, collapse networks. It turns out that Nvidia is also organized along similar lines.
And it is not surprising to me that the 2 companies operating differently than what many MBAs have recommened for decades are 2 of the wealthiest companies in the world today. Just like GM and Boeing were the wealthiest in their day.
Apple and Nvidia working together in the IT age would be like Boeing and GM working together in the 40s. We'd probably have Jetson flying cars today if they had. (They do jointly own HRL so maybe ...;-)