Microsoft is working on internal processor designs for server computers that run the company’s cloud services. This contributes to the industry’s efforts to reduce reliance on Intel chip technology.
The world’s largest software company is using Arm designs to make a processor that will be used in its data centers, according to people familiar with the plans. It is also exploring the use of another chip that powers part of its Surface line of PCs. People asked not to be identified and to discuss private initiatives. Intel’s stock fell 6.3 percent to close at $ 47.46 (about Rs. 3,500) in New York, down 21 percent this year.
The move is a major commitment by Microsoft to provide itself with the most important piece of hardware in use. Cloud computing competitors like Amazon are well advanced with similar efforts. They have argued that their chips are better suited to some of their needs and offer cost and performance advantages over off-the-shelf silicon, which is primarily provided by Intel.
Microsoft’s efforts are leading to a server chip rather than one for its Surface devices, although the latter is possible, one respondent said. The company’s chip design department reports to Jason Zander, head of the Azure cloud business, rather than Panos Panay, who oversees Surface products. Microsoft and Arm representatives declined to comment on whether Microsoft is working on server and PC processors.
“Since silicon is a fundamental building block for technology, we continue to invest in our own capabilities in areas such as design, manufacture and tools and promote and strengthen partnerships with a large number of chip providers,” said Microsoft spokesman Frank Shaw.
Microsoft has been stepping up its hiring of processor engineers in recent years, recruiting them in the backyard from chip makers like Intel, Advanced Micro Devices, and Nvidia.
The second largest manufacturer of chips for PCs, AMD is making a comeback in the server market after Intel largely ruled out most of the past decade. AMD shares fell 1 percent on Friday. Xilinx, another chip maker that AMD is acquiring, was down 1.8 percent.
The Xeon line of Intel server chips currently powers most of the machines at the heart of the Internet and corporate networks, generating the company’s most profitable source of income. Despite AMD’s recent gains, it still has around 90 percent of that market. Some Xeon models cost as much as a small car.
“The incredible demand for computers powered by new workloads like AI is leading to more silicon experiments in the cloud. Building on decades of innovation in the x86 ecosystem, we strive to offer our customers the world’s best CPUs and new products from GPUs to AI chips, ”said a statement from Intel. “In this expanding market, we expect to gain share in many areas such as AI training, 5G networks, graphics and autonomous driving.”
Customers like Microsoft have increasingly turned to alternative solutions to understand the mountain of data that cloud computing and smartphones generate. The introduction of artificial intelligence to automate this process has sparked a flurry of new chip designs. The biggest concern for owners of the huge data centers behind services like Office 365 is the cost of providing power for their growing hardware footprint. Arm-based chips are often more energy efficient.
If Microsoft pushes its own chip for PCs, it will follow Apple, which is removing its entire Mac line of Intel processors. While neither Apple nor Microsoft devices own much of the PC market, their offerings are positioned as premium products with leaner designs and advanced features. When it announced its first new Macs based on the M1 chip, Apple touted the increase in performance compared to standard PCs.
Microsoft currently uses Qualcomm’s Arm-based chips in some of its Surface PCs. It ported Windows to work on these types of chips that are typically used in smartphones. Apple also uses Arm technology in its processors. Other Surface models use Intel chips.
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