Microsoft's In-House AI Chip Faces Significant Delays and Performance Concerns

Microsoft's own AI chip delayed six months in major setback -- in-house chip now reportedly expected in 2026, but won't hold a candle to Nvidia Blackwell

A new report claims that despite having spent years designing its own AI chips, Microsoft's first in-house silicon offering has been delayed by six months. Furthermore, when it finally does launch in 2026, it will reportedly fall short of the performance of Nvidia's Blackwell chips, according to The Information. A new report claims Microsoft's chip is taking much longer than expected, which will amplify the gulf in performance to Nvidia Blackwell, making them even less competitive by the time the chips go into production. The chip, code-named Braga, has reportedly been delayed by at least six months, pushing mass production into next year. According to inside sources cited in the report, the chip is "expected to fall well short of the performance of Nvidia's flagship Blackwell chip," which came out last year. In the fast-moving world of AI, it's a huge blow for Microsoft, which wanted to deploy the chip in its data centers this year. According to the report, people from the project blame unanticipated design changes, staffing constraints, and high turnover as the reasons for the delay. While Nvidia remains the industry leader in the field, Microsoft, as well as Google, Amazon, and beyond, are all working to develop in-house silicon to reduce their reliance on Nvidia. As the report notes, Nvidia seems unperturbed by the efforts, CEO Jensen Huang going so far as to suggests that many rival chip projects would be abandoned by big tech companies, asking "What's the point of building an ASIC if it's not going to be better than the one you can buy?" If the latest reports of Microsoft's chip delay are true, Huang might just be proved right. Per the report, Microsoft has been working on a chip since 2019 and revealed Maia 100 in 2023. The 128-core Arm CPU was expected to show up in data centers in early 2024. Unfortunately, the chip has mostly been used for internal testing rather than real-world usage, and Microsoft sources reportedly claimed the chip isn't being used to power any of Microsoft's AI services. This is largely because the chip, conceived prior to OpenAI's ChatGPT revolution, is designed for image processing, not generative AI and LLM use. Microsoft is reportedly working on three chips behind the scenes, dubbed Braga, Braga-R, and Clea, targeting data center deployment in 2025, 2026, and 2027, respectively. The delay of the former casts doubt on whether Microsoft will meet this ambitious launch target. The Information reports that all three chips are designed for inference -- a separate chip designed for training AI models was reportedly cancelled in early 2024. One of the aforementioned changes to design was a shift to include new features at the behest of OpenAI, a move that apparently made the chip unstable during simulations and set the project back several months. Microsoft didn't adjust the deadline, despite the setback, and the team was reportedly under so much stress that one-fifth of the people on some teams have reportedly left. Microsoft allegedly won't have chips to compete with Nvidia's offerings until 2027, the Clea variant of its Maia chip, with the company lagging behind Nvidia massively in the meantime. Naturally, this also doesn't factor in any major leaps Nvidia makes in the meantime.

Microsoft's next-gen AI chip production delayed to 2026, The Information reports

June 27 (Reuters) - Microsoft's (MSFT.O), opens new tab next-generation Maia AI chip is facing a delay of at least six months, pushing its mass production to 2026 from 2025, The Information reported on Friday, citing three people involved in the effort. When the chip, code-named Braga, goes into production, it is expected to fall well short of the performance of Nvidia's (NVDA.O), opens new tab Blackwell chip that was released late last year, the report said. Microsoft had hoped to use the Braga chip in its data centers this year, the report said, adding that unanticipated changes to its design, staffing constraints and high turnover were contributing to the delay. Microsoft did not immediately respond to a Reuters request for comment. Like its Big Tech peers, Microsoft has focused heavily on developing custom processors for artificial intelligence operations and general purpose applications, a move that would help reduce the tech giant's reliance on pricey Nvidia chips. Cloud rivals Amazon (AMZN.O), opens new tab and Alphabet's (GOOGL.O), opens new tab Google have both raced to develop chips in-house, customized for their specific needs with the goal of improving performance and reducing costs. Microsoft had introduced the Maia chip in November 2023, but has lagged its peers in ramping it up to scale. Google, meanwhile, has seen success with its custom AI chips - called Tensor Processing Units - and in April unveiled its seventh-generation AI chip designed to speed the performance of AI applications. Amazon in December also unveiled its next-generation AI chip Trainium3 that is set to be released late this year. Reporting by Deborah Sophia in Bengaluru; Editing by Shailesh Kuber Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Microsoft's next-gen AI chip production delayed to 2026: Report - The Economic Times

Microsoft's next-gen Maia AI chip, code-named Braga, faces a six-month delay, pushing mass production to 2026. Design changes, staffing issues, and turnover caused setbacks. The chip is expected to underperform compared to Nvidia's Blackwell. Microsoft trails Amazon and Google, who've advanced faster in custom AI chip development and deployment.Microsoft's next-generation Maia AI chip is facing a delay of at least six months, pushing its mass production to 2026 from 2025, The Information reported on Friday, citing three people involved in the effort. When the chip, code-named Braga, goes into production, it is expected to fall well short of the performance of Nvidia's Blackwell chip that was released late last year, the report said. Microsoft had hoped to use the Braga chip in its data centers this year, the report said, adding that unanticipated changes to its design, staffing constraints and high turnover were contributing to the delay. Microsoft did not immediately respond to a Reuters request for comment. Like its Big Tech peers, Microsoft has focused heavily on developing custom processors for artificial intelligence operations and general purpose applications, a move that would help reduce the tech giant's reliance on pricey Nvidia chips. Cloud rivals Amazon and Alphabet's Google have both raced to develop chips in-house, customized for their specific needs with the goal of improving performance and reducing costs. Microsoft had introduced the Maia chip in November 2023, but has lagged its peers in ramping it up to scale. Google, meanwhile, has seen success with its custom AI chips - called Tensor Processing Units - and in April unveiled its seventh-generation AI chip designed to speed the performance of AI applications. Amazon in December also unveiled its next-generation AI chip Trainium3 that is set to be released late this year.

Microsoft's Ambitions to Overthrow NVIDIA's AI Dominance Are Faltering, as First In-House AI Chip Is Delayed With Subpar Performance Expectations

Microsoft's AI chip project seems to be facing massive setbacks, as the company has pushed production into 2026, and initial performance doesn't look too promising. With NVIDIA's growing influence over the AI markets, Big Tech decided to have its own venture in the chip business by creating custom silicon. Microsoft was one of the primary companies in the race to develop its own AI chips, followed by the likes of Google and Amazon. However, despite pouring in vast financial and technical resources, Big Tech still hasn't managed to crack the "AI chip" code. Now, according to a report by The Information, it is claimed that Microsoft's AI chip project is now delayed by up to six months. The initial performance evaluation reports don't look very competitive. Microsoft's chip venture, codenamed "Braga", is claimed to now go under mass production by 2026, which marks a delay of six years. Moreover, it is argued that the chip's performance is lower than NVIDIA's Blackwell architecture, which was released back in 2024, so in terms of competing with Team Green, Microsoft's chip isn't expected to catch up. It is revealed that the massive R&D costs and chip design revisions have forced Microsoft to push the production timeline ahead. The primary reason why Big Tech resorted to creating its own AI chips was to reduce dependency on NVIDIA's hardware, mainly due to how in-demand it is. Apart from Microsoft, companies like Google and Amazon have been using in-house AI chips in data centers, but NVIDIA's AI chips retain their superiority on a larger scale. NVIDIA's CEO, Jensen Huang, has acknowledged the competition the firm faces from custom chips, but he has also said that why bother creating custom chips if NVIDIA does it better? Microsoft's AI projects have been scaled down massively since their inception, given that the "AI hype" has decreased to where it was a few months ago. It would be interesting to see how Microsoft manages to pull off the chip project, since it faces roadblocks for now.

Microsoft's Next-Gen AI Chip Still Lags Nvidia's Blackwell, Postpones Launch - Microsoft (NASDAQ:MSFT)

Microsoft Corp. MSFT postponed the commercialization of its in-house next-gen artificial intelligence chip, Maia (code-named Braga), by at least six months from 2025 to 2026 due to unexpected changes to its design and staffing constraints. There were also concerns over the chip lagging behind Nvidia Corp.'s NVDA Blackwell chip that hit the market in 2024, Reuters reported on Friday, citing the Information. Microsoft introduced the Maia chip in November 2023, but unlike its competitors, the company has struggled to ramp up production. Also Read: Microsoft's New AI Lab Powers Wisconsin Manufacturing Cloud rivals like Amazon.Com AMZN (with its Trainium3 chip) and Alphabet Inc.'s Google GOOGL GOOG (with its Tensor Processing Units) have made more significant strides in in-house chip development and deployment. These advancements by rivals underscore the intense competition among tech giants to develop custom AI processors, aiming to optimize performance and reduce reliance on external suppliers like Nvidia, thereby reducing costs. In 2024, Microsoft reportedly purchased close to 485,000 Nvidia "Hopper" AI chips, beating Meta Platforms META, which procured 224,000 chips. For context on Nvidia's dominant position and financial performance, the company reported first-quarter revenue of $44.1 billion, up 69% year-over-year and up 12% from the fourth quarter. The revenue beat a Street consensus estimate of $43.2 billion. Nvidia faced an export ban on H20 products to China on April 9, prompting it to book a $4.5 billion charge in the first quarter. Still, Nvidia guided for second-quarter revenue of $45.0 billion, +/- 2%. The guidance includes the loss of $8.0 billion in H20 revenue due to the export controls. Barclays projected Nvidia to reach a market cap of $5 trillion backed by AI market leadership, growing opportunities in sovereign AI, and the Blackwell AI platform. In June, Nvidia overtook Microsoft to become the world's most valuable publicly traded company, with a market cap of $3.4 trillion. Price Actions: MSFT stock is trading higher by 0.10% to $497.98 at last check Friday. NVDA is up 1.49%. Read Next: Amazon's Powerful AWS Custom Chip To Get An Upgrade - Why Is It Important? Photo via Shutterstock MSFTMicrosoft Corp$496.79-0.13%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum71.59Growth50.05Quality33.67Value13.24Price TrendShortMediumLongOverviewAMZNAmazon.com Inc$218.250.52%GOOGAlphabet Inc$173.68-0.43%GOOGLAlphabet Inc$172.73-0.47%METAMeta Platforms Inc$731.000.68%NVDANVIDIA Corp$157.041.31%Market News and Data brought to you by Benzinga APIs

Microsoft's next-gen AI chip production delayed to 2026, The Information reports

(Reuters) -Microsoft's next-generation Maia AI chip is facing a delay of at least six months, pushing its mass production to 2026 from 2025, The Information reported on Friday, citing three people involved in the effort. When the chip, code-named Braga, goes into production, it is expected to fall well short of the performance of Nvidia's Blackwell chip that was released late last year, the report said. Microsoft had hoped to use the Braga chip in its data centers this year, the report said, adding that unanticipated changes to its design, staffing constraints and high turnover were contributing to the delay. Microsoft did not immediately respond to a Reuters request for comment. Like its Big Tech peers, Microsoft has focused heavily on developing custom processors for artificial intelligence operations and general purpose applications, a move that would help reduce the tech giant's reliance on pricey Nvidia chips. Cloud rivals Amazon and Alphabet's Google have both raced to develop chips in-house, customized for their specific needs with the goal of improving performance and reducing costs. Microsoft had introduced the Maia chip in November 2023, but has lagged its peers in ramping it up to scale. Google, meanwhile, has seen success with its custom AI chips - called Tensor Processing Units - and in April unveiled its seventh-generation AI chip designed to speed the performance of AI applications. Amazon in December also unveiled its next-generation AI chip Trainium3 that is set to be released late this year. (Reporting by Deborah Sophia in Bengaluru; Editing by Shailesh Kuber)

Microsoft AI Chip Production Delayed, The Information Reports Citing Sources

--Microsoft is facing a delay of at least six months in starting mass production of its new AI chip, code-named Braga, The Information reported, citing three people involved in the effort. --Design issues, staffing restrictions and a high turnover are all contributing to the delay, according to The Information. --Microsoft is now expected to start mass production of its chip in 2026, The Information said, citing the three people involved in the effort. --The Information said a Microsoft spokesperson declined to comment.