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Codename Athena Microsoft developing secret AI chips to challenge Nvidia’s dominance

Microsoft is reportedly working on its own AI chips to train complex language models. The move is thought to be intended to free the corporation from reliance on Nvidia chips, which are in high demand. 

Select Microsoft and OpenAI staff members have been granted access to the chips to verify their functionality, The Information reported on Tuesday. 

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“Microsoft has another secret weapon in its arsenal: its own artificial intelligence chip for powering the large-language models responsible for understanding and generating humanlike language,” read The Information article. 

Since 2019, Microsoft has been secretly developing the chips, and that same year the Redmond, Washington-based tech giant also made its first investment in OpenAI, the company behind the sensational ChatGPT chatbot. 

Nvidia is presently the main provider of AI server chips, and businesses are scrambling to buy them in order to use AI software. For the commercialization of ChatGPT, it is predicted that OpenAI would need more than 30,000 of Nvidia’s A100 GPUs. 

While Nvidia tries to meet demand, Microsoft wants to develop its own AI chips. The corporation is apparently speeding up work on the project, code-named “Athena“.

Microsoft intends to make its AI chips widely available to Microsoft and OpenAI as early as next year, though it hasn’t yet said if it will make them available to Azure cloud users, noted The Information.

Microsoft joins other tech titans making AI chips 

The chips are not meant to replace Nvidia’s, but if Microsoft continues to roll out AI-powered capabilities in Bing, Office programs, GitHub, and other services, they could drastically reduce prices.

Bloomberg reported in late 2020 that Microsoft was considering developing its own ARM-based processors for servers and possibly even a future Surface device. Microsoft has been working on its own ARM-based chips for some years.

Although these chips haven’t yet been made available, Microsoft has collaborated with AMD and Qualcomm to develop specialized CPUs for its Surface Laptop and Surface Pro X devices.

The news sees Microsoft join the list of tech behemoths with their own internal AI chips, which already includes the likes of Amazon, Google, and Meta. However, most companies still rely on the use of Nvidia chips to power their most recent large language models.

The most cutting-edge graphics cards from Nvidia are going for more than $40,000 on eBay as demand for the chips used to develop and use artificial intelligence software increases, CNBC reported last week. 

The A100, a nearly $10,000 processor that has been dubbed the “workhorse” for AI applications, was replaced by the H100, which Nvidia unveiled last year.