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A bombshell new report from Bloomberg states Microsoft is teaming up with Nvidia’s nemesis—AMD—to ensure the company doesn’t continue to fortify its position as the vanguard of AI technology. The two companies are reportedly working together on unspecified AI products that seek to rival Nvidia in the AI hardware and software market. Recently it was revealed that Microsoft has been working on its own AI chip it calls Athena for some time now. However, a Microsoft spokesperson has denied AMD’s involvement in that project. That does not mean the two companies aren’t working on a different AI chip that has never been revealed.
The (paywalled) Bloomberg article states Microsoft is providing financial support for AMD for its own expansion into AI products and that the two companies are also working on Athena together. Bloomberg says its sources include several people who are close to the project. If the sources are correct, it makes for a powerful pairing given Microsoft’s existing $10 billion investment into OpenAI’s ChatGPT, which it has integrated into Bing and its Edge browser. AMD has tremendous chip design assets but is much smaller than Nvidia and has always been the underdog in the industry.
AMD unveiled its MI300 AI accelerator at CES this year, which packs at whopping 146 billion transistors.
Credit: AMD
Microsoft’s Athena project has reportedly been in the works for years and is being built on TSMC’s 5nm node. The project is far enough along that engineering samples are currently in the hands of some Microsoft employees. However, Athena is being pitched as a simple cost-cutting measure for its Azure data centers, which use Nvidia hardware. Analysts estimate Microsoft could dramatically decrease its expenditures by employing its own silicon, similar to how both Google and Amazon use custom chips for their data centers. Microsoft has reportedly spent $2 billion on Athena, which is expected to be more widely deployed in 2024. For its part, AMD has stated it has opportunities to work on custom AI silicon for partners, which sounds similar to its partnerships with Microsoft and Sony for the APUs it provides for their consoles.
The move seems related to Microsoft’s recent interest in designing its own silicon to power its future ventures. In addition to the Athena project, it was also recently revealed that the company is also working on custom ARM-based SoCs. Those ARM chips might also be designed with a nod to running Windows 12 as fast as possible, marking the first time we can remember Microsoft has attempted to pair hardware and software from the ground up in a way that mimics Apple’s overall strategy.
As noted at the top, Bloomberg updated its article after publication to include a denial from Microsoft. A Microsoft spokesman named Frank Shaw stated, “AMD is a great partner, however, they are not involved in Athena.” That doesn’t mean Microsoft isn’t investing in the company, which has made AI one of its top priorities as it faces an uphill battle against Nvidia. At CES, it unveiled the MI300, which combines a CPU, GPU, and memory in a single package. AMD says it offers up to an 8X uplift in AI performance over its previous Instinct APU, but due to its size and cost, it’s not a high-volume product. The company also has professional GPUs, but even its own slides reveal it can’t compete with Nvidia.
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