Microsoft has an internal target to amass 1.8 million AI chips by the end of 2024, according to a document viewed by Business Insider.
Microsoft is trying to make generative AI faster, better, and cheaper, but the effort relies heavily on Microsoft buying the chips, graphic processing units, primarily from designer Nvidia.
The document suggests that Microsoft plans to triple the number of GPUs it has in 2024.
The company, in partnership with OpenAI, is at the forefront of the generative AI boom. Staying at the cutting edge of this field is expensive.
$100 billion in future spending
From this current fiscal year to the 2027 fiscal year, Microsoft expects to spend around $100 billion on GPUs and data centers, two people familiar with the plans told BI.
Microsoft’s spokesperson Frank Shaw declined to comment, citing the standard quiet period public companies must adhere to before reporting earnings. The company is scheduled to release results in coming days.
Other tech giants are building huge stores of GPUs, too. That’s one of the reasons Nvidia is now worth more than $2 trillion. Meta CEO Mark Zuckerberg earlier this year said the social-media company will purchase about 350,000 Nvidia H100 GPUs in 2024 and will have around 600,000 of these and equivalent chips by the end of the year.
Nvidia recently unveiled Blackwell, its latest and fastest GPU. Then there are H100s from Nvidia that are already one of the most powerful GPUs on the market, with an estimated price tag of around $30,000.
BI recently obtained another document that revealed Microsoft had delivered “record-level GPU capacity” in the second half of last year, but no specific figures were mentioned.
Analysts at DA Davidson estimated that Microsoft spent $4.5 billion on Nvidia chips last year, a figure that one Microsoft executive told BI was in the ballpark of its actual spending.
Microsoft has an internal effort to design its own AI chips to reduce reliance on Nvidia, but some employees are skeptical because the company is years behind Nvidia and the state of the art moves forward so quickly.
Are you a Microsoft employee or someone else with insight to share?
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