Microsoft Leverages OpenAI's Custom Chip Designs to Accelerate Semiconductor Strategy

Microsoft's plan to fix its chip problem is, partly, to let OpenAI do the heavy lifting

Microsoft is taking a page from OpenAI's playbook, literally. Bloomberg first reported that the tech giant plans to leverage its partner's custom chip development to bolster its own struggling semiconductor efforts, a move that looks increasingly pragmatic given Microsoft's lackluster performance compared to rivals like Google and Amazon. The arrangement is straightforward: OpenAI is designing AI chips with Broadcom, and Microsoft gets full access to the innovations. "As they innovate even at the system level, we get access to all of it," CEO Satya Nadella explained on a newly released interview with podcaster Dwarkesh Patel, describing plans to adopt OpenAI's designs and then extend them for Microsoft's own purposes. Under a revised partnership agreement, Microsoft secured intellectual property rights to OpenAI's chip designs while maintaining access to the company's AI models through 2032. The only carve-out? OpenAI's consumer hardware, which the ChatGPT maker presumably wants to develop and sell independently. The collaboration underscores a broader reality in tech: building cutting-edge AI chips is brutally difficult and expensive. Rather than continuing to struggle alone, Microsoft is betting that OpenAI's expertise -- plus a smartly structured contract -- can accelerate its own ambitions.

Microsoft taps OpenAI chip designs to advance its semiconductor push

OpenAI is developing custom AI chips with Broadcom and Microsoft now holds the IP rights to these designs giving it strategic control through 2032. Microsoft will leverage OpenAI's custom chip development to enhance its semiconductor efforts, according to a report by Bloomberg. OpenAI is designing AI chips with Broadcom, and Microsoft will have full access to these innovations. Microsoft CEO Satya Nadella stated on a podcast with Dwarkesh Patel that Microsoft will adopt and extend OpenAI's designs for its own purposes, noting, "As they innovate even at the system level, we get access to all of it." Under a revised partnership agreement, Microsoft secured intellectual property rights to OpenAI's chip designs. The agreement also provides Microsoft with continued access to OpenAI's AI models through 2032. The only exclusion from this agreement involves OpenAI's consumer hardware. Microsoft is utilizing OpenAI's expertise and the structured contract to accelerate its ambitions in building AI chips.

Microsoft to leverage OpenAI's chip designs for its own semiconductor efforts By Investing.com

Investing.com -- Microsoft plans to use access to OpenAI's custom AI semiconductor development to bolster its own chip initiatives, according to CEO Satya Nadella. "As they innovate even at the system level, we get access to all of it," Nadella said on a podcast hosted by author Dwarkesh Patel released Wednesday, as reported by Bloomberg News. "We first want to instantiate what they build for them, but then we'll extend it." OpenAI is working with Broadcom Inc. to custom-design chips and networking hardware. Microsoft has been developing its own chips but has achieved less success in this area compared to cloud competitors like Alphabet Inc.'s Google. Nadella confirmed on the podcast that Microsoft will work with designs from both OpenAI and its own team, noting that the company has the necessary IP rights to do so. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Microsoft to use OpenAI tech to power its next AI chips

New Fairwater datacentres with faster systems and low-water cooling will power advanced AI training and deployment. Microsoft is preparing for its next major leap in artificial intelligence by partnering with OpenAI to incorporate their custom chip designs into its in-house semiconductor plans. This shows how seriously Microsoft takes the global competition in AI. CEO Satya Nadella said Microsoft will leverage OpenAI's hardware research to integrate chip designs optimised for training large, complex AI models. The initiative reflects a broader industry trend, as tech giants worldwide develop specialised processors to reduce reliance on third-party suppliers while improving the speed and efficiency of AI operations. By developing its own chips, Microsoft aims to gain greater control over performance, reduce long-term costs, and accelerate breakthroughs in model training. This partnership also signals a deeper alignment between the two companies as AI innovation rapidly intensifies. Also read: OnePlus 16 display details leaked ahead of OnePlus 15 launch: Here's what we know Nadella said that Microsoft will fold OpenAI's system-level chip designs into its own in-house work. This includes processors and networking hardware that OpenAI has been developing with Broadcom. Microsoft plans to refine these designs so they can be produced at a large scale and then expand them further under its own intellectual property. Also read: Google Pixel 9 Pro price drops by over Rs 25,000 on Amazon: How this deal works The updated agreement strengthens the already close relationship between the two companies. Microsoft gains access to hardware specifically suited for training OpenAI's large models, while OpenAI benefits from Microsoft's global cloud infrastructure. Nadella called the alignment "strategic", noting that OpenAI's design strengths will help speed up Microsoft's semiconductor goals. Microsoft's new Fairwater datacentres will play a central role in this push, as these sites function as connected hubs for training and deploying the next generation of AI models. One facility in Atlanta uses a new chip and rack design that allows very high data processing speeds. It also includes advanced cooling systems that use almost no water, a sharp contrast to older data centres that require large amounts of it. Also read: Pixel users may finally be able to remove the At a Glance widget from the home screen, confirms Google As per Scott Guthrie, Microsoft's Cloud and AI group lead, the aim is not only to add more hardware but to build systems that work together smoothly. Microsoft says it has spent years improving the architecture and networking behind large AI training so customers can rely on stable performance at scale. This approach sets Microsoft apart from rivals that develop chips mostly for use within their own ecosystems.