Microsoft and AMD are reportedly working together on AI technology. NVIDIA dominates the graphics market, but AMD provides high-performance graphics cards that people use for gaming and other activities. NVIDIA is known for powerful graphics processing units (GPUs) and holds a large share of the gaming, professional visualization, and AI markets. Many gaming laptops and desktops feature NVIDIA GPUs and the technology is also commonly used in data centers to process AI and machine learning workloads.
Microsoft has been taking advantage of NVIDIA GPUs in its Azure data centers. The software creator is now working with AMD to enhance the AI capabilities of its GPUs. As reported by Bloomberg, Microsoft is providing engineering resources and collaborating with AMD on a Microsoft-designed processor that is specifically designed for AI workloads, referred to as “Athena”. Microsoft has denied AMD involvement in the development of Athena.
The presence of a competitive market is advantageous for Microsoft, as it works to put AI features into most of its products. Having a competitive market could potentially help Microsoft significantly cut on server costs. Microsoft is reportedly working on a private version of its ChatGPT platform for businesses. This version may cost up to 10 times more than the regular version of ChatGPT. Lower costs resulting from cheaper server hardware would make the products more attractive.
This is not the first time AMD and Microsoft have worked together. AMD’s Ryzen processors have been used in older Surface PCs but not the more recent devices.
AMD has experienced strong stock performance in the past few years due to an impressive product portfolio and positive growth outlook. However, AMD’s stock is just like any other stock and subject to fluctuating market conditions. On Wednesday, AMD’s stock dropped but saw a 6.1% gain on the next day. Despite partnering with Microsoft on AI products, there is no guarantee that AMD’s stock will remain stable.
Microsoft is challenging Apple Silicon by developing its own SoCs based on Arm architecture. It is anticipated that Windows 12, which is being developed simultaneously with the Arm chip, will be optimized for the Arm architecture. Microsoft’s in-house Arm chips are expected to bring a number of advantages with AI integration, and since the Arm chip will provide cross-platform support, it could potentially help save energy.
To summarize, Microsoft and AMD are working to integrate AI technology, allowing Microsoft to save costs on server hardware. Microsoft is also developing its own SoCs based on Arm architecture for Windows 12 which Microsoft and Apple both benefit from. There is no guarantee that AMD’s stock price will remain stable but the company has experienced a strong performance in the past few years.
