Microsoft starts developing own chips for datacentres and computers – report

Bloomberg reported that Microsoft has started designing its own processors to be used in cloud systems and Surface computers, reducing reliance on Intel.

Sources told Bloomberg that the software and cloud giant Microsoft has started working on its in-house chip designs using ARM architectures. The primary target business line to support is the datacentres powering Microsoft’s cloud computing systems, which include Azure for business and OneDrive for consumers.

Presently most datacentres are being powered by Intel’s Xeon series chips built on x86 architecture. While they are powerful, they are expensive. This is partly due to Intel’s dominant position in this market, and partly because of the higher investment needed for marginal gains in computing power. There is a broad recognition in academia and in industry that Moore’s Law is slowing down, while some even claim its end is already in sight. To keep computational advances going becomes more costly and time consuming. Meanwhile, new specialised computing demand, for example that coming out of the increased deployment of AI, would be best served by chips designed to optimise for the special use cases rather than by general-purpose solutions.

Another key incentive datacentre operators see in ARM architecture is its power consumption advantage. With thousands of servers housed in one datacentre and dozens of datacentres distributed throughout the world, the hyperscalers like Microsoft need to consider the total cost when sourcing chips, including computing power, size, power consumption, as well as cooling costs. A minor saving on unit level could translate to big savings in total.

Microsoft has not officially confirmed (or denied) the report, but if proved true, Microsoft would become the latest among the cloud computing heavyweights to design their own chips. Google started working on its own chips already in 2017, initially for its Pixel phones but later extended to its cloud infrastructure, with the OpenTitan open source chip design announced a year ago. Amazon has delivered two generations of its own data centre chips, called Graviton and Graviton2, with the first unveiled late 2018 and the second a year later. Alibaba’s Hanguang 800, its own datacentre processor optimised for AI, was announced in September 2019.

Bloomberg was also told that another initiative has started in Microsoft to design its own PC chips using ARM architecture. Microsoft isn’t the first computer company to do so. Apple has already put its own customised chipset, called “M1”, in commercial products with its latest line-up of Mac computers announced in November. This wouldn’t even be Microsoft’s own first initiative to move away from over-reliance on x86 architecture. It has already launched Surface computers using Qualcomm Snapdragon chipsets. The latest report, again if proved true, would point to deeper vertical integration Microsoft is undertaking.