TECH NEWS – Reportedly, the AI chip Microsoft planned to produce in-house is underperforming and falling short of the tech giant’s expectations…

Microsoft’s in-house AI chip initiative appears to be hitting serious turbulence, with production delayed until next year and early performance benchmarks looking far from impressive. As Nvidia continues to tighten its grip on the AI market, tech giants are racing to build their own custom silicon to reduce dependency. Microsoft was among the first movers, followed closely by Google and Amazon.

Yet despite deploying vast financial and technical resources, these efforts have yet to bear fruit. According to The Information, Microsoft’s AI chip project could be delayed by as much as six months. The chip, known internally by the codename Braga, is reportedly six years behind schedule and underperforms compared to Nvidia’s 2024 Blackwell architecture—placing Microsoft at a considerable disadvantage. Massive R&D costs and the need to rework the chip’s design have forced Microsoft to shift its production timeline.

Big Tech’s motivation to build their own chips is largely driven by a desire to lessen reliance on Nvidia hardware—and demand is high. The trio of Microsoft, Google, and Amazon is determined to maintain an edge with proprietary AI chips. Nvidia CEO Jensen Huang acknowledged the competition posed by custom silicon but remarked: “Why bother building your own chips if Nvidia already does it better?” It’s a subtle attempt to dissuade companies from going independent. (As reported earlier today, OpenAI is also exploring ways to reduce its Nvidia dependency.)

Microsoft’s AI projects have been significantly scaled back, especially as global AI enthusiasm has retreated to earlier levels. The company’s chip ambitions are now at a crossroads, and it remains to be seen whether they can overcome the mounting hurdles.

Source: WCCFTech, The Information