Microsoft to Transition to In-House AI Chip Production

Published Date : 2/10/2025 

Microsoft's Chief Technology Officer, Kevin Scott, revealed the company's strategy to primarily use its own custom chips in data centers, reducing reliance on external suppliers like Nvidia and AMD. 

Microsoft Chief Technology Officer and Executive Vice President of Artificial Intelligence, Kevin Scott, spoke at the Microsoft Briefing event at the Seattle Convention Center Summit Building in Seattle, Washington, on May 21, 2024. Jason Redmond | AFP | Getty Images

Microsoft aims to primarily use its own chips in its data centers in the future, according to the tech giant's chief technology officer, Kevin Scott. This strategic move could reduce its reliance on major chip suppliers like Nvidia and AMD. Semiconductors and the servers within data centers have been crucial in the development of artificial intelligence models and applications.

Nvidia has dominated the market with its graphics processing units (GPUs), while AMD holds a smaller share. However, major cloud computing players, including Microsoft, have designed their own custom chips tailored for data centers. During a fireside chat at Italian Tech Week, moderated by CNBC, Scott outlined Microsoft's chip strategy for AI.

Microsoft currently uses chips from Nvidia and AMD in its data centers, focusing on selecting the best silicon that offers the optimal price performance. 

Frequently Asked Questions (FAQS): 

Q: What is Microsoft's long-term plan for its data centers?

A: Microsoft plans to primarily use its own custom chips in its data centers to reduce reliance on external suppliers like Nvidia and AMD.

Q: Why is Microsoft designing its own chips?

A: Microsoft is designing its own chips to optimize compute for specific workloads and to reduce dependency on external suppliers, enhancing the efficiency of their products.

Q: What are some of the custom chips Microsoft has already launched?

A: Microsoft has launched the Azure Maia AI Accelerator for AI workloads and the Cobalt CPU. The company is also working on its next generation of semiconductor products.

Q: How is Microsoft addressing the issue of overheating chips?

A: Microsoft has unveiled new cooling technology using 'microfluids' to solve the issue of overheating chips.

Q: What is the current state of computing capacity in the tech industry?

A: There is a significant shortage of computing capacity, and tech giants like Microsoft are struggling to build enough capacity to meet the growing demand for AI. 

More Related Topics :