Microsoft Corp (NASDAQ:MSFT) is planning to introduce Advanced Micro Devices Inc’s (NASDAQ:AMD) artificial intelligence chips to its cloud computing customers, aiming to rival Nvidia Corp’s (NASDAQ:NVDA) components.

This significant development will be detailed further at the upcoming Build developer conference next week, according to a report from Reuters.

The tech giant’s Azure cloud service will integrate AMD’s MI300X AI chips, offering an alternative to Nvidia’s high-demand H100 GPUs. 

This move is designed to alleviate the difficulty many companies face in securing Nvidia’s GPUs due to their popularity in the data center chip market for AI applications.

Azure’s integration of AMD’s flagship chips is expected to boost its AI capabilities, enabling customers to build and run large-scale AI models. 

Clusters of these GPUs are essential for handling the extensive data and computation required for sophisticated AI tasks.

AMD projects $4 billion in AI chip revenue this year, highlighting the chips’ strength in training and executing substantial AI models. 

Microsoft will also continue to provide access to its in-house AI chips, known as Maia, through its cloud services.

Additionally, Microsoft will preview its new Cobalt 100 custom processors at the conference. These processors, offering a 40% performance improvement over previous Arm Holdings PLC (NASDAQ:ARM) based technology, are already in use by companies like Snowflake Inc (NYSE:SNOW). 

Originally announced in November, these chips are being tested to enhance Microsoft Teams and aim to compete with Amazon.Com, Inc. (NASDAQ:AMZN) in-house Graviton CPUs.

Microsoft stock has gained more than 34% in the past 12 months. Investors can gain exposure to the stock via Technology Select Sector SPDR Fund (NYSE:XLK) and IShares U.S. Technology ETF (NYSE:IYW).

Price Action: MSFT shares 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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