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Microsoft and AMD Looking to Compete with Nvidia with AI Processor

Microsoft and AMD may be collaborating on an AI chip to counter Nvidia's efforts, according to a Thursday report by Bloomberg.

The Bloomberg report (paywalled) didn't name its sources, but they were characterized as being "people with knowledge of the situation." The notion that Microsoft had been working on an AI chip to avoid the costs of Nvidia's GPUs used in datacenters surfaced last month in a report by The Information (also paywalled). Per that report, Microsoft was said to be working on an AI chip codenamed "Athena."

When asked back then to verify The Information report, a Microsoft spokesperson told Redmond that Microsoft had "nothing to share" about such alleged AI chip efforts.

However, Microsoft has talked with some media outlets about it, such as The Verge, which got a denial from a top Microsoft spokesperson about AMD being involved with Microsoft's Athena AI chip.

"Microsoft spokesperson Frank Shaw has, however, denied that AMD is involved with Athena," The Verge wrote in this May 5 story. Frank X. Shaw is Microsoft's chief communications officer.

AMD certainly is certainly involved in the AI chip business, as noted in The Verge story, and large service providers, such as Google, have been making Tensor Processing Unit chips to support its AI models. So, it might be unsurprising that Microsoft is building its own chip as it ramps up its Azure OpenAI service and AI-based Copilot in Microsoft 365.

Microsoft does have a partnership with Nvidia, which maybe is sensitive in this matter. However, Microsoft isn't shy about entering partner turf when it sees fit. It did so with its PC hardware partners with the rollout of the Microsoft Surface PC products line a few years back, for instance.

So far, the anonymously sourced press stories about Microsoft's alleged AI chip under development have mostly fueled stock speculation.

About the Author

Kurt Mackie is senior news producer for 1105 Media's Converge360 group.

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