Microsoft Plans Big AI Chip Investment, To Look Beyond OpenAI

Microsoft is preparing to pour significant resources into building its own set of artificial intelligence chips as the company looks to become self-sufficient and not become too reliant on OpenAI, the company's AI Chief Executive Officer, Mustafa Suleyman, told employees in a recent employee-only meeting.

“It’s critical that a company of our size, with the diversity of businesses that we have, that we are, you know, able to be self-sufficient in AI, if we choose to,” Suleyman said in the meeting, as quoted by Business Insider.

This comes at a time when Microsoft has slipped behind the likes of Google (read Gemini), xAI (Grok) and OpenAI in the race for building the most advanced large language models (LLMs).

Although Microsoft had invested $10 billion in OpenAI back in 2023, the relationship between the two companies has left a lot to be desired, with the two entities now set for a realignment that could eventually open the door for OpenAI to list itself. Microsoft now lists OpenAI as one of its competitors.

Keeping that in mind, Suleyman said that although Microsoft will continue to back OpenAI, it will also be investing in open-source models, collaborations with other developers and its own in-house systems.

In late August, Microsoft notably unveiled MAI-1 preview, the first large language model the company has built.

However, the model currently ranks 24th among text models on the LMArena leaderboard, meaning the company has a long way to go before it can compete with the likes of OpenAI, Gemini and Grok in the race for building the most advanced LLMs.

To get there, Microsoft is banking on a new AI chip cluster, with Suleyman pointing out that MAI-1 was built on 15,000 Nvidia H100 GPUs. This pales in comparison to the six-to-ten times larger clusters deployed by Google, Meta and Grok.