Apple unveils new AI-focused chip in upgraded iPad Pro models

Apple (AAPL.O) on Tuesday introduced a new chip called the M4 that it said would outclass personal computers designed for artificial intelligence - but put the new chip in an iPad Pro model rather than a laptop.

The move is unusual for Apple, which typically puts its latest chips into its Mac lineup, where M3 chips started to show up last fall. But analysts told Reuters that Apple is likely eager to get its latest chips, which are more power-efficient and have larger portions of the chip dedicated to handling AI tasks, into the hands of app makers ahead of its annual software developer conference next month.

The iPhone maker's latest product launch event comes as the Silicon Valley heavyweight trails Big Tech rivals while they race to build AI into its products across their businesses and dominate the emerging technology.

Apple said the iPad Pro - its highest-priced model - will have upgraded displays and start at $1,000 for an 11-inch (27.9-cm) model and $1,300 for a 13-inch (33-cm) model.

It will come with an M4 chip with a larger "neural engine," part of the chip specifically designed for the kind of computing required by AI features such as generating text or images. Apple chips have featured a neural engine since 2017, but rivals such as Intel (INTC.O) and (QCOM.O) have begun to tout their competitive technologies for personal computers.

"The neural engine makes M4 an outrageously powerful chip for AI," Tim Millet, vice president of platform architecture at Apple, said during the presentation. "In fact, with this level of performance, the neural engine and M4 is more powerful than any neural processing unit in any AI PC today."

Read also: Apple's new iPad Pro likely to launch in May, ramps up overseas production

Apple also introduced new models of its mid-priced iPad Air, which will now come in a larger 13-inch screen size at $800, as well as the 11-inch size it previously came in for $600. The models come with Apple's M2 chip, which first came to market in Apple's MacBooks in 2022.

Apple often introduces new iPads in May, a time when education customers are making purchasing decisions for the next academic year. But in recent years, Apple has started to transform its higher-priced models into devices for creative and business professionals with its iPad Pro models.

Precisely what AI features the new chips could power might not become fully clear until Apple's developer conference, where it often shows new capabilities for Siri, its voice assistant, as well as the rest of its operating systems.

For now, many AI features - such as helping zoom in on a user during a video call and slightly altering the look of their eyes to make it look as though they are looking directly into the camera - are not likely to inspire a wave of upgrades, according to some analysts.

"Is it really enough for people to look into it and buy them? Probably not," said Mikako Kitagawa, an analyst at Gartner. "It has to be some kind of remarkable experience."

Apple rivals Microsoft (MSFT.O) and Alphabet's Google (GOOGL.O) have dived headlong into AI, introducing chatbots that aim to act as virtual assistants for tasks such as writing emails or tapping out lines of computer code.

Read: Apple in talks to let Google's Gemini power iPhone AI features

While those companies' stocks' have surged to record highs, Apple's share have fallen 6% year to date as it struggles with weak iPhone demand and tough competition in China, and as investors wait for it to show how it will leverage AI technology.

Apple Chief Executive Tim Cook said last week the company is "very bullish about our opportunity in generative AI" and plans to make more announcements later this year.

Carolina Milanesi, an analyst with Creative Strategies, said upgraded iPads could be a way for Apple to get new chips onto the market ahead of its developer conference next month, where it may reveal more about how it plans to address AI.

That could come in the form of automating common tasks to make them faster, or letting Siri, the company's voice-based assistant, delve deeper into apps to carry out tasks on the user's behalf.

The key question facing Apple is how much it can improve its AI features while processing most information on the device itself, for privacy reasons.

"I always say that the AI is only as smart as the data it can get its hands on," Milanesi said.