Microsoft to Debut AI Chip Next Month That Could Cut Nvidia GPU Costs

Microsoft next month plans to unveil the company’s first chip designed for artificial intelligence at its annual developers’ conference, according to a person with direct knowledge. The move, a culmination of years of work, could help Microsoft lessen its reliance on Nvidia-designed AI chips, which have been in short supply as demand for them has boomed.

The Microsoft chip, similar to Nvidia GPUs, is designed for data center servers that train and run large language models, the software behind conversational AI features such as OpenAI’s ChatGPT. Microsoft’s data center servers currently use Nvidia GPUs to power cutting-edge LLMs for cloud customers, including OpenAI and Intuit, as well as for AI features in Microsoft’s productivity apps.