Apple’s new iPhone will use Arm’s next-generation chip technology for AI

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Apple’s iPhone 16 will launch on Monday with a next-generation chip based on Arm’s newest design architecture, marking the latest step in the Cupertino tech giant’s push to bring generative artificial intelligence features to its smartphones. 

Apple will reveal the A18 chip at its event on Monday, with the company embracing SoftBank-owned Arm’s newest V9 chip design in its smartphones, sources familiar with the matter told the Financial Times.

Apple’s adoption of V9 for the iPhone — which makes up close to half of its total revenues — represents a boost for Arm, which has a multiyear licensing agreement with Apple. Arm chief executive Rene Haas has previously said V9 brings in twice the royalties of the previous generation V8.

Arm’s chip architecture refers to a set of instructions that provide the building blocks for the chip, with the UK-based, US-listed company securing revenue through both licensing and royalties. Arm launched V9 in 2021.

Apple is already using Arm’s V9 architecture for its newest line of M4 MacBook chips, which it announced in May. It said the M4 brought a “giant leap” in performance for the next generation of its PCs, expected to be announced in the coming months.

Apple and Arm declined to comment. Apple is in the process of recasting itself as an AI-focused company, announcing a number of features in June that it collectively calls “Apple Intelligence”. 

These include a smarter Siri, custom emoji generation and photo editing capabilities using its own in-house AI models, as well as a partnership giving users free access to OpenAI’s ChatGPT and a new “Private Cloud Compute” infrastructure aimed at securing user data if it leaves their phone to tap Apple’s models.

But the increased computer demands that come from running AI models on a pocket-sized device make advances in chip technology essential. Apple Intelligence can only work on the company’s most advanced iPhone 15 Pro and Pro Max devices that have its A17 Pro chip, which uses Arm’s previous generation of architecture, the V8.

After a blockbuster IPO in September last year, Arm shares are up about 70 per cent since the start of 2024 as the company benefits from diversifying into PC, automotive and industrial chips and rides a wave of investment in AI chips. 

Investors will be watching the iPhone 16 launch closely for any further detail that Apple might give on when the features will land in front of consumers. The company has signalled that it will use a staggered approach, introducing some features first and adding other languages and regions later. 

A developer beta test of iOS 18.1, the update to iOS18 that will bring Apple Intelligence to the iPhone, is ongoing.