According to the WSJ report, the move by Apple has the potential to give the company an advantage in the AI arms race.

The project, which was initially codenamed as Project ACDC (Apple Chips in Data Centre) reportedly aims to leverage the company's chip design expertise for its server infrastructure.

The project, internally codenamed as Project ACDC (Apple Chips in Data Center), aims to leverage Apple's chip design expertise for its server infrastructure, the report said.

According to a Reuters report, Apple, which has emerged as a major chip designer in recent years, did not respond to comment on the matter.

WSJ reported that Apple's server chip will likely be focused on running AI models, also known as inference, rather than in training AI models, where Nvidia is dominant.

Apple CEO Tim Cook, amid growing pressure due to a slow roll out of AI services, had last week signaled that Apple plans to unveil a raft of features powered by the technology in the coming months, reports Reuters.

According to the WSJ report, Apple's Project ACDC has been in the works for several years and it is uncertain when the new chip will be unveiled, if ever.

The report added that Apple has been closely working with Taiwan Semiconductor Manufacturing Co to design and initiate production of such AI chips.

However, it remains uncertain whether both companies have produced a definitive result, as per the WSJ report.