In This Article:
(Bloomberg) -- Microsoft Corp. is working with Advanced Micro Devices Inc. on the chipmaker’s expansion into artificial intelligence processors, according to people with knowledge of the situation, part of a multipronged strategy to secure more of the highly coveted components.
Most Read from Bloomberg
-
Steve Schwarzman Holds Off Giving Money to DeSantis After Meeting Him
-
US Inflation Shows Signs of Moderating, Giving Fed Room to Pause
-
Treasuries Advance After CPI; Stocks Edge Higher: Markets Wrap
-
Tucker Carlson’s Twitter Move Wipes $235 Million From Rumble
The companies are teaming up to offer an alternative to Nvidia Corp., which dominates the market for AI-capable chips called graphics processing units, said the people, who asked not to be identified because the matter is private. The software giant is providing support to bolster AMD’s efforts, including engineering resources, and working with the chipmaker on a homegrown Microsoft processor for AI workloads, code-named Athena, the people said.
Frank Shaw, a Microsoft spokesman, denied that AMD is part of Athena. “AMD is a great partner,” he said. “However, they are not involved in Athena.”
AMD shares jumped more than 6.5% on Thursday, and Microsoft gained about 1%. AMD representatives declined to comment. Nvidia stock declined 1.9%.
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 $10 billion into ChatGPT maker OpenAI, and has vowed to add such features to its entire software lineup.
Read More: Microsoft to Bring OpenAI’s Chatbot Technology to Office Apps
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 Corp. executive Rani Borkar, and the group now has a staff of almost 1,000 employees. The Information last month reported on Microsoft’s development of the Athena artificial-intelligence chip.
Several hundred of those employees are working on the Athena project, and Microsoft has spent about $2 billion on its chip efforts, according to one of the people. But the undertaking doesn’t 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’s also trying to find ways to get more Nvidia’s processors, underscoring the urgent shortage Microsoft and others are facing.