Apple — like Google, Meta, Microsoft, OpenAI and everyone else this side of Nvidia — is reportedly working on custom server hardware to power AI models as it prepares to introduce a slew of new features.

Over the past decade, Apple has emerged as a leading player designing chips for iPhones, iPads, Apple Watch and Mac computers. The server project, which is internally code-named Project ACDC—for Apple Chips in Data Center—will bring this talent to bear for the company’s servers, according to people familiar with the matter.

Apple watcher Mark Gurman followed up saying a similar-sounding project was canceled and it doesn’t make sense anyway: it would be too expensive, lack differentiation, and Apple prefers on-device AI.

Update: Added Gurman’s rebuttal.