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 latest design architecture, the latest step in the Cupertino tech giant's push to equip its smartphones with generative artificial intelligence features.

Apple will unveil the A18 chip at its event on Monday, and the company will use the latest V9 chip design from SoftBank-owned Arm in its smartphones, sources familiar with the matter told the Financial Times.

Apple's adoption of V9 for the iPhone – which accounts for nearly half of the company's total revenue – represents a boost for Arm, which has a multi-year licensing deal with Apple. Arm CEO Rene Haas previously said V9 will bring in twice as much royalties as the previous V8 generation.

Arm's chip architecture refers to a set of instructions that provide the building blocks for the chip. The UK-based and US-listed company generates revenue through licenses and royalties. Arm launched V9 in 2021.

Apple already uses Arm's V9 architecture for its latest line of M4 MacBook chips, announced in May. The company said the M4 brings a “huge leap in performance” to the next generation of its PCs, which are due to be announced in the coming months.

Apple and Arm declined to comment. Apple is repositioning itself as an AI-focused company and in June announced a series of features it collectively calls “Apple Intelligence.”

These include a smarter Siri, the generation of custom emojis and photo editing features using its own AI models, and a partnership that gives users free access to OpenAI's ChatGPT and a new “private cloud compute” infrastructure that aims to protect user data when it leaves their phone and accesses Apple's models.

But the increased computing demands of 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, which feature the A17 Pro chip, which uses Arm's previous generation of architecture, the V8.

Following a blockbuster IPO in September last year, Arm shares have risen about 70 percent since the start of 2024 as the company benefits from diversification 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 details Apple may reveal about when the features will be presented to consumers. The company has hinted that it will take a staggered approach by rolling out some features first and adding other languages ​​and regions later.

A developer beta test of iOS 18.1, the update to iOS18 that brings Apple Intelligence to the iPhone, is currently underway.