Microsoft to Offer AMD AI Chips in Cloud Computing Services

Microsoft (NASDAQ:MSFT) has unveiled plans to introduce a platform of artificial intelligence chips from Advanced Micro Devices (NASDAQ:AMD) for its cloud computing customers, aiming to rival components manufactured by Nvidia (NASDAQ:NVDA). Further details on this initiative will be disclosed at Microsoft's Build developer conference scheduled for next week.

At the conference, Microsoft will also roll out a preview of its new Cobalt 100 custom processors.

The clusters of AMD's flagship MI300X AI chips will be available through Microsoft's Azure cloud computing service, providing customers with an alternative to Nvidia's H100 family of GPUs, which currently dominate the data center chip market for AI. High demand for Nvidia's GPUs often results in supply shortages.

Typically, companies need to string together multiple GPUs to build AI models or run applications due to the complexity and volume of data involved. AMD's MI300X chips are designed to be powerful enough to train and execute large AI models efficiently.

In addition to Nvidia's AI chips, Microsoft's cloud computing unit also offers access to its own in-house AI chips known as Maia.

In a separate development, Microsoft will preview its Cobalt 100 processors next week, which promise a 40% improvement in performance compared to other processors based on Arm Holdings (NASDAQ:ARM) technology. Several companies, including Snowflake (NYSE:SNOW), have already started using these chips.

The Cobalt chips, announced in November, are undergoing testing for integration into Teams, Microsoft's business messaging tool, and are positioned to compete with Amazon.com's (NASDAQ:AMZN) in-house Graviton CPUs.

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