Microsoft Taps AMD to Build AI Chips

Microsoft is teaming up with AMD to jointly develop AI processors, according to reports.

Bloomberg cites sources saying the pair are working together to create an alternative to Nvidia, which dominates the AI market through its GPUs.

Microsoft is reportedly providing AMD with engineering resources. The software giant has been trying to build out its own silicon division for some time under the tutelage of former Intel executive Rani Borkar.

The chip unit now has nearly 1,000 employees and several hundred are working on Athena, the AI chip Microsoft is working on in-house that surfaced in April. Microsoft has spent about $2 billion thus far on chip development.

However, AMD is not involved in Athena, a Microsoft spokesperson told Bloomberg.

Instead, the pair will join forces to build AI processors at a time when hardware is in demand as more companies look to adopt generative AI capabilities in the wake of ChatGPT’s popularity.

At AMD’s earnings call this week, CEO Lisa Su said AI is the company’s “no. 1 strategic priority.”

Azure OpenAI Service's clients jump 10-fold

Microsoft’s AMD deal comes as it is infusing generative AI tools into an array of products and services, including in Azure and search platforms like Edge and Bing and its 365 productivity suites.

Related:Microsoft is Making its Own AI Chips, Called Athena

Microsoft is not abandoning Nvidia, whose GPUs have largely been used to train its ever-expanding AI tools and services. It just wants more sources for AI chips as it looks to add more computing power than it ever expected due to surging demand.

Microsoft said its Azure OpenAI Service, the only cloud that offers ChatGPT and GPT-4, grew customers 10-fold to over 2,500 in the just-concluded fiscal Q3, up from the prior quarter.

Also, Microsoft said that in just three months, over 10,000 organizations have signed up for Copilot for Business. Copilot, developed by Microsoft’s GitHub division, turns natural language prompts into code. In addition, after adding Copilot to its Power Platform, the number of Power monthly active users rose by 50% to 33 million year-over-year.