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Microsoft Corp (Nasdaq: MSFT) just announced an AI chip that will likely compete with the highly in-demand Nvidia GPUs. Its shares are slightly in the green at writing.

Microsoft also unveiled a new CPU today

The tech behemoth unveiled the said artificial intelligence accelerator it’s calling the “Maia 100” today at its Ignite conference in Seattle. How well does that chip fare against Nvidia’s H100, however, remains unknown.

On Wednesday, Microsoft also unveiled a central processing unit dubbed the Cobalt 100 for general computing tasks. This Arm-based chip will go up against Intel processors.

The announcement today confirms that Microsoft is not just sticking to software but exploring the hardware side of things as well to capitalise on the rising interest in Gen AI.

Its commitment to becoming a leader in artificial intelligence has pushed MSFT up over 50% this year.

Analyst reacts to Microsoft revealing new chips

Microsoft said its Cobalt 100 will be commercially available in 2024. Timeline for the Maia 100, however, is yet to be disclosed. According to Dylan Patel of Semianalysis:

Microsoft is creating its own AI processors to improve performance per watt and performance per dollar versus Nvidia’s offerings.

He’s convinced that lower cost will eventually benefit customers subscribing to Azure’s artificial intelligence offerings.

Introducing the NVIDIA H200

"141GB of memory at 4.8 terabytes per second, nearly double the capacity and 2.4x more bandwidth compared with its predecessor, the NVIDIA A100." pic.twitter.com/zimKAfTAJE

— Smoke-away (@SmokeAwayyy) November 13, 2023

The news arrives weeks after Microsoft Corp reported a solid first quarter and said its revenue is now expected to handily surpass $60 billion in Q2 (find out more). Wall Street currently has a consensus “buy” rating on the Nasdaq-listed firm. 

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