Microsoft is shifting its reliance from external chips to custom-designed silicon in the future, according to Chief Technology Officer Kevin Scott. The company currently uses Nvidia and AMD chips in its data centers, mainly for AI-related tasks.
However, Microsoft is already working on its own chip designs, such as the Azure Maia AI Accelerator and Cobalt CPU. These efforts aim to fine-tune the entire data center system for optimal performance in AI computing. This move comes as demand for AI computing continues to grow rapidly, with companies like Meta, Amazon, Alphabet, and Microsoft expected to spend over $300 billion this year on AI-related activities.
Scott stated that even with new data centers built, Microsoft’s current capacity is not enough to keep up with the growing demand. As a result, the company plans to invest in custom chip technology to meet the increasing need for AI computing power. This decision has Wall Street analysts optimistic about MSFT stock, with a Strong Buy consensus rating and 21.2% upside potential.
Analysts have assigned 33 Buys and one Hold in the last three months, making MSFT stock an attractive option for investors looking to capitalize on the growing demand for AI computing. With Microsoft’s plans to rely more on custom chips, investors can expect significant benefits from this move, particularly in the field of AI-related tasks.
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Source: https://www.tipranks.com/news/microsoft-msft-wants-to-rely-more-on-its-own-custom-chips-in-the-future