Comment by loeg
3 days ago
How big is the local LLM market? I have trouble imagining Apple will move enough units to make $20k/ea worth it for them as a business segment.
3 days ago
How big is the local LLM market? I have trouble imagining Apple will move enough units to make $20k/ea worth it for them as a business segment.
100,000 units a year would be $2 billion annually.
And usually, most of a company's revenue comes from the heaviest spenders.
So figure there are some out there who will by tens of these because they have some "idea to change the world". (Whether true or not.) Some startups, etc.
I'd wager, across planet earth right now, it should be trivial to push 100,000 units per year. Probably closer to 500,000 units per year. So that's an easy $10 billion a year.
$2-10 billion is meaningful for any company. Even one as large is Apple.
Especially if it's a first step towards a stronger foothold in the AI inference space.
They can then expand down market to grow the pie further.
For example, with truly dedicated inference boxes.
And given the demand for $7,000 Sparks and sold out $5,000 GPUs, the market for these $20,000 machines is likely much higher than my 100,000 unit lower bound. (Earth is a big place. It doesn't take much excitement to generate massive sales in a space with currently insatiable demand.)
The only question you need to ask is whether or not Apple will do anything to design and engineer memory in-house, the money, and the capability is there that is the challenge. because you don’t need to select $20,000 computer if you get that under control by bringing it in-house.
In short, Apple needs to roll up there sleeves and get busy the three hyenas of memory and that nameless memory company in China will not sell you memory when you need it at a reasonable price. In the past Motorola said no, IBM said no, and Intel said no. This is another one of those times for Apple to adapt by designing and engineering around the competition.
The memory constraint isn’t design. It’s fab capacity. Apple has exactly 0 fabs. By the time they hired domain experts and built fabs and tuned to the point of reasonable yields, the crunch would have been over for 5 years, and apple would have wasted 20 billion with no return.
They have been sold out of a lot of units, due to people developing AI, so apparently, it is significant.
I think the bet is that it will get bigger, both at the consumer level, and with orgs eventually discovering ready-made solutions for having their own on-prem inference.
Probably worth it just as an investment into their developer ecosystem. They could probably sell at a deep loss and still justify it.