Joint fight against Nvidia? Microsoft and AMD working together on AI processors, sources say
Microsoft is reportedly working with AMD to develop artificial intelligence processors, according to sources familiar with the matter. This is part of Microsoft's multi-pronged strategy to secure the supply of artificial intelligence processor chips.
The two companies are working together to explore alternatives to Nvidia's GPU chips, the people familiar with the matter said. Currently, Nvidia dominates the AI processor chip market. In the cooperation, Microsoft provided AMD with financial support, while the two sides are working together to develop the code name "Athena", Microsoft's own artificial intelligence processor.
AMD shares rose more than 6.5 percent on Thursday and Microsoft shares rose about 1 percent on the news. Both companies declined to comment on the news. Nvidia shares were down 1.9 percent.
ChatGPT and other artificial intelligence chatbots (13.920, 0.54, 4.04%) have received a lot of attention recently, and industry demand for AI processors has expanded. Microsoft is both one of the foremost cloud computing service providers and a major driver of AI adoption. Microsoft previously invested $10 billion in OpenAI, the developer of ChatGPT, and announced it was integrating the AI technology behind ChatGPT into all of its software.
The move also shows that Microsoft's involvement in the chip industry is gradually deepening. Over the past few years, Microsoft is building a chip division under former Intel executive Rani Borkar, which now employs nearly 1,000 people. Last month, the media also revealed the details of Microsoft's development of the artificial intelligence chip "Athena".
A person familiar with the matter said that hundreds of these employees were working on the Athena project, and that Microsoft had already invested around $2 billion in the chip. However, this does not mean that Microsoft will part ways with Nvidia. For now, Nvidia's GPU chips are still the main tool for training and reasoning with AI models, so Microsoft will continue to work closely with Nvidia. However, the industry as a whole is currently facing a shortage of AI processors, and Microsoft is looking for ways to get more Nvidia processors.
Microsoft's partnership with OpenAI, as well as Microsoft's own plans to launch a range of AI services, means that Microsoft needs far more AI computing power than the company had previously anticipated when ordering chips and building data centres. Having seen the capabilities of ChatGPT, many companies are interested in integrating the technology into their own products or enterprise applications, and Microsoft has already used ChatGPT's technology to launch a new version of conversational Bing Search, as well as AI-enhanced versions of its Office tools.
Microsoft is also updating older products, such as GitHub's code generation tools. All of these AI programs run in Microsoft's Azure cloud computing platform and therefore require the support of more AI processors. Currently, Nvidia offers these processors at a premium price and in tight supply.
For AMD, AI is also a key priority. We are very excited about our own opportunities in AI, which is our highest strategic priority," AMD Chief Executive Officer, Mr. C.F. Su, said during the earnings call on Tuesday. We are in the very early stages of the AI computing era, and AI is gaining in popularity and growing faster than any other technology in recent history."
Suzi Fung also said that AMD has the opportunity to produce some of the bespoke chips for its largest customers for use in AI data centres.
Bolka's team at Microsoft is also currently prioritising the Athena project, in addition to developing chips for servers and Surface computers. The team is developing a GPU chip that can be used for training and reasoning on artificial intelligence models. The chip is already being tested internally and could be widely used as soon as next year, a person familiar with the matter said.
But the source also said that even if the project moves ahead on schedule, the first version is just a starting point. It takes years to design and produce a powerful chip, and Nvidia has a big lead. Currently, Nvidia is the chip supplier of choice for many providers of generative AI tools, including Amazon AWS and Google Cloud, and Tesla CEO Elon Musk has stockpiled thousands of Nvidia processors for his AI business.
Developing an alternative to Nvidia's chips will be a challenging task. NVIDIA currently also offers a full suite of supporting hardware and software around these chips, including chips, programming languages, networking equipment and servers, so that customers can quickly build their own capabilities.
This is one of the reasons why NVIDIA is currently in the lead. Furthermore, Microsoft is not the only company trying to develop its own AI processors. Amazon acquired Annapurna Labs in 2016 and has subsequently developed two AI processors. Google also has its own AI training chip.
The two companies are working together to explore alternatives to Nvidia's GPU chips, the people familiar with the matter said. Currently, Nvidia dominates the AI processor chip market. In the cooperation, Microsoft provided AMD with financial support, while the two sides are working together to develop the code name "Athena", Microsoft's own artificial intelligence processor.
AMD shares rose more than 6.5 percent on Thursday and Microsoft shares rose about 1 percent on the news. Both companies declined to comment on the news. Nvidia shares were down 1.9 percent.
ChatGPT and other artificial intelligence chatbots (13.920, 0.54, 4.04%) have received a lot of attention recently, and industry demand for AI processors has expanded. Microsoft is both one of the foremost cloud computing service providers and a major driver of AI adoption. Microsoft previously invested $10 billion in OpenAI, the developer of ChatGPT, and announced it was integrating the AI technology behind ChatGPT into all of its software.
The move also shows that Microsoft's involvement in the chip industry is gradually deepening. Over the past few years, Microsoft is building a chip division under former Intel executive Rani Borkar, which now employs nearly 1,000 people. Last month, the media also revealed the details of Microsoft's development of the artificial intelligence chip "Athena".
A person familiar with the matter said that hundreds of these employees were working on the Athena project, and that Microsoft had already invested around $2 billion in the chip. However, this does not mean that Microsoft will part ways with Nvidia. For now, Nvidia's GPU chips are still the main tool for training and reasoning with AI models, so Microsoft will continue to work closely with Nvidia. However, the industry as a whole is currently facing a shortage of AI processors, and Microsoft is looking for ways to get more Nvidia processors.
Microsoft's partnership with OpenAI, as well as Microsoft's own plans to launch a range of AI services, means that Microsoft needs far more AI computing power than the company had previously anticipated when ordering chips and building data centres. Having seen the capabilities of ChatGPT, many companies are interested in integrating the technology into their own products or enterprise applications, and Microsoft has already used ChatGPT's technology to launch a new version of conversational Bing Search, as well as AI-enhanced versions of its Office tools.
Microsoft is also updating older products, such as GitHub's code generation tools. All of these AI programs run in Microsoft's Azure cloud computing platform and therefore require the support of more AI processors. Currently, Nvidia offers these processors at a premium price and in tight supply.
For AMD, AI is also a key priority. We are very excited about our own opportunities in AI, which is our highest strategic priority," AMD Chief Executive Officer, Mr. C.F. Su, said during the earnings call on Tuesday. We are in the very early stages of the AI computing era, and AI is gaining in popularity and growing faster than any other technology in recent history."
Suzi Fung also said that AMD has the opportunity to produce some of the bespoke chips for its largest customers for use in AI data centres.
Bolka's team at Microsoft is also currently prioritising the Athena project, in addition to developing chips for servers and Surface computers. The team is developing a GPU chip that can be used for training and reasoning on artificial intelligence models. The chip is already being tested internally and could be widely used as soon as next year, a person familiar with the matter said.
But the source also said that even if the project moves ahead on schedule, the first version is just a starting point. It takes years to design and produce a powerful chip, and Nvidia has a big lead. Currently, Nvidia is the chip supplier of choice for many providers of generative AI tools, including Amazon AWS and Google Cloud, and Tesla CEO Elon Musk has stockpiled thousands of Nvidia processors for his AI business.
Developing an alternative to Nvidia's chips will be a challenging task. NVIDIA currently also offers a full suite of supporting hardware and software around these chips, including chips, programming languages, networking equipment and servers, so that customers can quickly build their own capabilities.
This is one of the reasons why NVIDIA is currently in the lead. Furthermore, Microsoft is not the only company trying to develop its own AI processors. Amazon acquired Annapurna Labs in 2016 and has subsequently developed two AI processors. Google also has its own AI training chip.
