Microsoft's multi-year investment shows how critical chips have become to gaining an edge in both AI and the cloud. Making them in-house lets companies wring performance and price benefits from the hardware. The initiative also could insulate Microsoft from becoming overly dependent on any one supplier, a vulnerability currently underscored by the industrywide scramble for Nvidia's AI chips. Microsoft's push into processors follows similar moves by cloud rivals. Amazon.com Inc. acquired a chip maker in 2015 and sells services built on several kinds of cloud and AI chips. Google began letting customers use its AI accelerator processors in 2018.
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