Apple is developing its own chip to run AI software in data centers the Wall Street Journal reported on Monday.

Apple whose shares were 1% higher before bell on Tuesday did not respond to Reuters request for comment.

The project codenamed as Project ACDC Apple Chips in Data Center aims to leverage Apples Chip design expertise for its server infrastructure.

The company has gained as mega chip designer in latest years thanks to success of its semiconductors that are used in iPhone, laptops and iPads.

Due to slow roll out of AI services CEO Tim Cook had last week signaled that Apple plans to unveil features powered by technology in coming months.

Apples server chip focused on running AI models famous as inference in training AI models.

Apple has been working with Taiwan Semiconductor Manufacturing Co 2330 TW to design and start production of such chips and it remains uncertain whether both companies have definitive result.

The company plans to hold virtual event on Tuesday where it is expected to showcase new iPad models some of which could come with new chip mission.

Project ACDC works for multiple years and it is unsure when the new chip will be announced.

We continue to feel bullish about our chance in generative AI and we are making investments.