Apple Mulled Entering the Cloud Wars With an AWS Competitor
Credit: Apple
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Apple once considered launching cloud services for app developers, which would compete with established developer cloud services from Amazon, Google, and Microsoft.
Developers depend on cloud services for several tasks, including off-device processing and data storage. If Apple had decided to launch developer cloud services, it would have been competing with well-established firms.
The Information reports that its inside sources tell it that Apple has internally mulled over providing server services to developers of apps for Apple devices, including the iPhone, iPad, and Mac. The publication says that while the internal deliberations have gone on for the last few years with no such service launching, Apple could eventually launch such a service.
The developer cloud services would have used Apple-built servers powered by Apple’s own “Apple Silicon” chips. The service would have provided massive computing power for developers, including those developing Artificial Intelligence apps. Those in the company who were pushing the idea believed the efficiency of Apple’s chips would end up saving money for developers versus the current cloud services.
While former Apple Cloud executive Michael Abbott was reportedly the biggest proponent of the developer cloud services, the debate about Apple offering developer cloud services continued, even after Abbott left the company in 2023. The discussions are said to have continued at least into the first half of 2024 and may still be ongoing, albeit on a smaller scale.
This isn’t the first time we’ve heard reports that Apple could use its in-house chips to power developer cloud services. In May 2024, iDrop News reported a secret project with the internal moniker of “Project ACDC” (Apple Chips in Data Centers), that had been “in the works for several years.” The project would be dedicated to developing Apple Silicon chips solely for use in Apple’s server farms.
Bloomberg’s Mark Gurman said at the time that Apple’s plan to use its own chips to process AI tasks in the cloud had been “hatched about three years ago,” but development ramped up after ChatGPT spurred the current AI craze.
Part of the initiative included the creation of Private Cloud Compute, which makes use of the same chips used in the Mac in Apple’s data centers for AI processing. The project later expanded to include the Apple Music and Photos teams, and was referred to internally as a more private version of Amazon’s Web Services.
Apple is still working on developing server hardware, as a May report indicated that Apple is developing new AI server chips to replace the M2 Ultra chips that currently handle Apple Intelligence queries.
Developer cloud services from Apple could both save and generate money for Apple. Apple currently pays out around $7 billion per year to Amazon and Google for their cloud services. Using its infrastructure could save a goodly chunk of that amount for the company. Meanwhile, it would be earning income from developers who want to use the services.
Developer cloud services could prove to be quite lucrative for Apple. Case in point: Google Cloud made up 12% of Alphabet’s 2024 revenue, bringing in an impressive $43.2 billion in revenue.
