Unavailability of NVIDIA's AI GPUs is forcing Microsoft to nudge customers towards AMD's offerings

Microsoft made a significant announcement on Thursday, revealing its plans to start offering AMD’s artificial intelligence (AI) chips, the MI300X for its cloud computing customers. This move will mean that AMD will go head-to-head directly against NVIDIA’s offerings. Microsoft will further elaborate upon this development at the upcoming Build Developer Conference.

At the conference, Microsoft will also unveil a preview of its new Cobalt 100 custom processors. These processors are designed to offer far superior performance compared to existing processors based on Arm Holdings’ technology and have already garnered interest from some prominent tech companies.

The clusters of AMD’s MI300X AI chips that will be offered through Microsoft’s Azure cloud computing service, will provide an alternative to Nvidia’s H100 family of GPUs, which currently dominate the AI chip market in data centers. However, because of its high demand, NVIDIA’s GPUs are often very challenging to obtain. Morover, they can be prohibitively expensive to buy or even lease, making Microsoft’s new offerings a much more viable option for customers.

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AMD expects to generate $4 billion in revenue from its AI chips this year. These chips are capable of training and running large AI models independently. This capability reduces the need for companies to string together multiple GPUs to handle data and computations, streamlining the process of building AI models and running applications.

In addition to NVIDIA’s chips, Microsoft’s cloud computing unit already offers access to its own in-house AI chips known as Maia. The introduction of AMD’s AI chips further expands the range of options available to customers, enhancing competition and driving innovation in the cloud computing market.

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The Cobalt 100 processors, set to be previewed at the conference, promise a significant performance boost of up to 40 per cent compared to other processors based on Arm Holdings’ technology.

These chips are currently being tested for use in Microsoft Teams, the company’s messaging tool for businesses, and are positioned to compete with Amazon.com’s in-house Graviton CPUs.

Amazon recently announced that social network Pinterest and fintech firm Robinhood Markets have begun using its Graviton chips, highlighting the growing competition in the cloud computing industry.

Microsoft’s foray into AI chips with AMD and the development of its own Cobalt processors signal the company’s commitment to driving innovation and delivering cutting-edge solutions to its customers.

(With inputs from agencies)