Apple's New iPhone to Feature Next-Generation AI Chip Technology from Arm

Apple's upcoming iPhone 16, set to be unveiled on Monday, will feature a next-generation chip based on Arm's new V9 architecture, marking the latest step in the tech giant's efforts to integrate generative AI capabilities into its smartphones.

At the Monday event, Apple is expected to introduce the A18 chip, which adopts the new V9 chip design from Arm, a company owned by SoftBank, according to sources familiar with the matter who spoke to the Financial Times.

Apple's decision to integrate the V9 architecture into the iPhone, which accounts for nearly half of its total revenue, represents a significant boost for Arm, which has a multi-year licensing agreement with Apple. Arm's CEO, Rene Haas, previously noted that V9 generates twice the royalties compared to the previous V8 generation.

Arm's chip architecture provides the foundational instructions for the chip's construction, with the UK-based company, which is listed in the US, earning revenue through both licensing and royalties. Arm introduced the V9 architecture in 2021.

Apple is already using Arm's V9 architecture for its new M4 chips in MacBooks, announced in May. The company described the M4 as a "giant leap" in performance for the next generation of its PCs, expected to be revealed in the coming months.

Neither Apple nor Arm commented on the matter. Apple is currently transforming itself into a company centered on artificial intelligence, announcing a range of features in June collectively referred to as "Apple Intelligence."

These features include a smarter Siri, personalized emoji generation, photo editing capabilities using Apple's in-house AI models, as well as a partnership providing users with free access to OpenAI's ChatGPT. The company is also introducing a new "Private Cloud Computing" infrastructure to secure user data when it leaves the device to utilize Apple's models.

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However, the increasing computational demands of running AI models on pocket-sized devices make advances in chip technology crucial. Apple Intelligence will only be available on Apple's most advanced devices, such as the iPhone 15 Pro and Pro Max, which feature the A17 Pro chip, based on Arm's previous V8 architecture.

Following a successful IPO in September last year, Arm's stock has surged around 70 percent since the start of 2024, benefiting from its diversification into chips for PCs, cars, and industrial applications, while also capitalizing on the wave of investment in AI chips.

Investors will be closely watching the iPhone 16 launch for any additional details Apple may provide on when these AI features will become available to consumers. The company has indicated it will take a phased approach, rolling out some features initially, with additional languages and regions to follow later.

A developer beta test of iOS 18.1, the update that will bring Apple Intelligence to the iPhone, is currently underway.