SEATTLE – Microsoft is working with Advanced Micro Devices (AMD) on the chipmaker’s expansion into artificial intelligence (AI) processors, according to people with knowledge of the situation, part of a multi-pronged strategy to secure more of the highly coveted components.
The companies are teaming up to offer an alternative to Nvidia, which dominates the market for AI-capable chips called graphics processing units, said the people. The software giant is providing support to bolster AMD’s efforts, and working with the chipmaker on a home-grown Microsoft processor for AI workloads, code-named Athena.
AMD shares jumped more than 6.5 per cent on Thursday, and Microsoft gained about 1 per cent. Nvidia stock declined 1.9 per cent.
The arrangement is part of a broader rush to augment AI processing power, which is in great demand after the explosion of chatbots like ChatGPT and other services based on the technology. Microsoft is both a top provider of cloud computing services and a driving force of AI use. The company has pumped US$10 billion (S$13.3 billion) into ChatGPT maker OpenAI, and has vowed to add such features to its entire software line-up.
The move also reflects Microsoft’s deepening involvement in the chip industry. The company has been building up a silicon division over the past several years under former Intel executive Rani Borkar, and the group now has a workforce of almost 1,000 employees. The Information news website last month reported on Microsoft’s development of the Athena AI chip.
Several hundred of those employees are working on the Athena project, and Microsoft has spent about US$2 billion on its chip efforts, according to one of the people. But the undertaking does not portend a split with Nvidia. Microsoft intends to keep working closely with that company, whose chips are the workhorses for training and running AI systems. It is also trying to find ways to get more of Nvidia’s processors, underscoring the urgent shortage Microsoft and others are facing.
Microsoft’s relationship with OpenAI and its own slate of newly introduced AI services are requiring computing power at a level beyond what the company expected when it ordered chips and set up data centres. OpenAI’s ChatGPT service has drawn interest from businesses that want to use it as part of their own products or corporate applications, and Microsoft has introduced a chat-based version of Bing and new AI-enhanced Office tools.
It is also updating older products like GitHub’s code-generating tool. All of those AI programs run in Microsoft’s Azure cloud and require the pricey and powerful processors that Nvidia provides.
The area is also a key priority for AMD.
“We are very excited about our opportunity in AI – this is our No. 1 strategic priority,” AMD chief executive officer Lisa Su said during an earnings call on Tuesday. “We are in the very early stages of the AI computing era, and the rate of adoption and growth is faster than any other technology in recent history.”
Ms Su also said that AMD has an opportunity to make partly customised chips for its biggest customers to use in their AI data centres. BLOOMBERG
