Microsoft plans to run most of its AI services on chips it designs itself, a shift that could save the company billions of dollars and reduce its dependence on industry juggernaut Nvidia.
The company on Monday unveiled Maia 300, the third generation of its custom AI chip, saying it will begin large-scale deployments in 2027. In a blog post, Azure chief Scott Guthrie said Maia will become “the primary AI inference system for Microsoft products and services.”
Microsoft CEO Satya Nadella called it “our biggest bet yet on our own silicon” in a post on X.
Maia 300 will produce 40% more AI output for the same amount of power as leading GPU-based systems, which Nvidia dominates, according to the company.
A full rack of the new chips will produce up to seven times as much AI output as the current generation, the company says. They’re designed for the kinds of tasks that are growing fastest, such as AI agents that work through multistep jobs and models that handle long documents or conversations.
The Redmond company designs the chips and relies on Taiwan Semiconductor Manufacturing Co. (TSMC) to make them, rather than buying finished chips from Nvidia. More-efficient chips also let Microsoft run AI services using less electricity, at a time when power supply has become one of the biggest constraints on AI expansion.
Microsoft and Nvidia remain big partners. Nadella and Nvidia CEO Jensen Huang shared the stage last week to launch Windows PCs built on Nvidia chips. Nvidia also remains a key supplier for Microsoft’s data centers, and Nadella said on the company’s July earnings call that Microsoft will be among the first cloud providers to deploy next-generation systems based on Nvidia’s Vera Rubin and AMD’s Helios.
Microsoft’s move is part of a larger trend among tech giants to design their own AI chips. Google has started selling its Tensor Processing Units directly to some customers, and Amazon has won over AI companies including Anthropic with its Trainium chips. Meta has rolled out its own AI chips, and OpenAI unveiled its first custom chip, built with Broadcom, in June.
Microsoft has been playing catch-up. Unlike Google’s and Amazon’s chips, Maia isn’t available for outside customers to rent. Microsoft’s first Maia chip, announced in 2023, was followed by a second-generation Maia 200 this January after delays. As of this summer, Maia 200 was running in just two U.S. data centers, The Information reported in August.
Maia 200, the current generation, already powers Microsoft 365 Copilot and runs models from OpenAI as well as Microsoft’s own. It’s now being deployed across the U.S., Europe and Australia, according to Microsoft. GitHub Copilot and Microsoft Foundry are set to move onto it by the end of the year.
The shift will take time. Evercore ISI analysts estimate that Maia will account for about 10% of Microsoft’s spending on AI chips by early 2027, CNBC reported.
Microsoft says it will share more details next month at its Ignite conference in San Francisco.