Microsoft Chief Technology Officer and Executive Vice President of Artificial Intelligence Kevin Scott speaks at the Microsoft Briefing event at the Seattle Convention Center Summit Building in Seattle, Washington, on May 21, 2024.
Jason Redmond | AFP | Getty Images
Microsoft would like to mainly use its own chips in its data centers in the future, the tech giant’s chief technology officer said on Wednesday, in a move which could reduce its reliance on major players like Nvidia and AMD.
Semiconductors and the servers that sit inside data centers have underpinned the development of artificial intelligence models and applications.
Tech giant Nvidia has dominated the space so far with its graphics processing unit (GPUs), while rival AMD has a smaller slice of the pie.
But major cloud computing players, including Microsoft, have also designed their own custom chips for specifically for data centers.
Kevin Scott, chief technology officer at Microsoft, laid out the company’s strategy around chips for AI during a fireside chat at Italian Tech Week that was moderated by CNBC.
Microsoft primarily uses chips from Nvidia and AMD in its own data centers. The focus has been on picking the right silicon — another shorthand term for semiconductor — that offers “the best price performance” per chip.
“We’re not religious about what the chips are. And … that has meant the best price performance solution has been Nvidia for years and years now,” Scott said. “We will literally entertain anything in order to ensure that we’ve got enough capacity to meet this demand.”
At the same time, Microsoft has been using some of its own chips.
In 2023, Microsoft launched the Azure Maia AI Accelerator which is designed for AI workloads, as well as the Cobalt CPU. In addition, the firm is reportedly working on its next-generation of semiconductor products. Last week, the U.S. technology giant unveiled new cooling technology using “microfluids” to solve the issue of overheating chips.
When asked if the longer term plan is to have mainly Microsoft chips in the firm’s own data centers, Scott said: “Absolutely,” adding that the company is using “lots of Microsoft” silicon right now.
The focus on chips is part of a strategy to eventually design an entire system that goes into the data center, Scott said.
“It’s about the entire system design. It’s the networks and the cooling and you want to be able to have the freedom to make the decisions that you need to make in order to really optimize your compute to the workload,” Scott said.
Microsoft and its rivals Google and Amazon are designing their own chips to not only reduce reliance on Nvidia and AMD, but also to make their products more efficient for their specific requirements.
Compute capacity shortage
Tech giants including Meta, Amazon, and Alphabet and Microsoft have committed to more than $300 billion of capital expenditures this year, with much of that focused on AI investments as they look to satisfy booming demand for AI.
Scott flagged that there is still a shortage of computing capacity.
“[A] massive crunch [in compute] is probably an understatement,” Scott said. “I think we have been in a mode where it’s been almost impossible to build capacity fast enough since ChatGPT … launched.”
Microsoft has been building capacity through data centers but it’s still not enough to meet demand, the CTO warned.
“Even our most ambitious forecasts are just turning out to be insufficient on a regular basis. And so … we deployed an incredible amount of capacity over the past year and it will be even more over the coming handful of years,” Scott said.
U.S. President-elect Donald Trump greets Elon Musk as he arrives to attend a viewing of the launch of the sixth test flight of the SpaceX Starship rocket on November 19, 2024 in Brownsville, Texas.
Brandon Bell | Getty Images News | Getty Images
NASA is requiring employees involved in Artemis missions with contractors SpaceX and Blue Origin to stay on the job during the government shutdown, CNBC has learned.
Their work will be unpaid during the shutdown furlough, but employees should record their time, NASA Chief Human Capital Officer Kelly Elliott wrote in an email to staffers on Wednesday. NASA employees are expected to receive pay for their work after a reopening.
In a separate memo from Monday, NASA’s acting finance chief, Steve Shinn, laid out details about missions that would be supported during a shutdown.
NASA will continue to support “planned operations” of the International Space Station, as well as any satellite mission that “is in the operations phase,” Shinn wrote. He added that NASA would support “Artemis operations during any funding lapse,” including employees and contractors working on those projects.
Shinn said NASA would furlough around 15,000 people and require around 3,000 staffers to keep working, part time or full time, during the shutdown.
The U.S. government’sshutdown began early Wednesday morning, setting the stage for the furlough of hundreds of thousands of federal workers and the closing of a number of key programs and services. Government employees who are considered “essential,” like Transportation Security Administration (TSA) officers and air traffic controllers, are required to continue working.
On its website, NASA describes Artemis as a campaign to “send astronauts to explore the Moon for scientific discovery, economic benefits, and build the foundation for the first crewed missions to Mars.” The memos this week didn’t name the contractors associated with the various Artemis missions.
SpaceX, which is helmed by Elon Musk, won major Artemis contracts with its Starship rocket, the tallest and most powerful rocket ever launched. SpaceX has flown its full Starship rocket system on 10 test flights since April 2023, and plans to conduct another on Oct. 13. Its prior Starship test flights included five failures, a partial failure and four successes.
Blue Origin, owned by Amazon founder Jeff Bezos, was given another Artemis contract, and work on its lunar lander will also continue during the shutdown, NASA employees told CNBC.
Artemis III, scheduled for 2027, will be the first to involve SpaceX directly. The mission would land two NASA astronauts on the south polar region of the Moon.
Early Artemis missions involved NASA working with Lockheed Martin and Boeing to design, build, analyze and then buy rockets that the agency would own outright. With Artemis II, which is scheduled for early 2026, NASA aims to send four astronauts around the moon without landing before returning to Earth.
And the goal of Artemis IV+ HLS, with SpaceX, is to put astronauts into the first lunar space station, helping NASA and its partners to prepare for an eventual human mission to Mars. Artemis V is expected to involve Blue Origin.
Neither SpaceX nor Blue Origin has finalized the design of their lunar landers, and so far have only built test hardware.
Representatives of NASA, SpaceX and Blue Origin didn’t immediately respond to a request for comment. An autoreply from NASA said the agency “is closed due to a lapse in government funding.”
“I am in furlough status; therefore, I am unable to respond to your message at this time,” said the message from Cheryl Warner, news chief in NASA’s communications office.
Thomas Kurian, CEO of Google Cloud, speaks at a cloud computing conference held by the company in 2019.
Michael Short | Bloomberg | Getty Images
Google has laid off more than 100 employees in design-related roles, CNBC has learned.
Earlier this week, the company laid off employees within the cloud unit’s “quantitative user experience research” teams and “platform and service experience” teams, as well as some adjacent teams, according to internal documents viewed by CNBC.
The roles often focus on using data, surveys and other tools to understand and implement user behaviors that inform product development and design.
Google has halved some of the cloud unit’s design teams, and many of those affected are U.S.-based roles. Some employees have been given until early December to find a new role within the company.
The company did not immediately respond to CNBC’s request for comment. Business Insider first reported that some cloud roles were eliminated.
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The latest layoffs come as Google accelerates cuts to focus spending on artificial intelligence infrastructure.
Since the beginning of the year, the search giant has offered voluntary exit packages to many U.S.-based units across the company and eliminated more than one-third of its managers overseeing small teams.
It also recently began pushing employees to use more AI in their daily work.
So far, the company has offered buyouts to U.S.-based employees from units such as human resources, hardware, search, ads, marketing, finance and commerce divisions.
CNBC reported in August that Google CEO Sundar Pichai told employees the company would need “to be more efficient as we scale up so we don’t solve everything with headcount.”
Other megacaps have also seen recent cuts.
In July, Microsoft laid off 9,000 employees across roles and geographies. Meta has also had layoffs.
Intel’s CEO Lip-Bu Tan speaks at the company’s Annual Manufacturing Technology Conference in San Jose, California, U.S. April 29, 2025.
Laure Andrillon | Reuters
Intel is in early talks with AMD to manufacture chips for it in its foundry business, according to a report from Semafor.
Intel shares rose 7% on Wednesday. AMD shares were up over 1%.
If AMD were to start manufacturing chips with Intel, it would be a significant win for the company’s foundry business, which is currently seeking big customers. Analysts say that a big customer would allow Intel Foundry to confidently invest in developing its manufacturing technology and would send a signal to other chip companies that Intel can handle their business.
It would also signal that AMD, which competes with Intel in x86-based chips for PCs and servers, is confident doing its manufacturing with its biggest competitor.
It is unclear how much manufacturing AMD would do with Intel, according to the report by Semafor’s Rohan Goswami. AMD currently manufactures its chips with TSMC.
In recent weeks, Intel has added several significant investors, including the U.S. government, Nvidia, and Softbank, which were all seen as votes of confidence as the company attempts to turn around its fortunes under new CEO Lip-Bu Tan. However, Nvidia did not commit to using Intel’s foundry.
Intel shares are up nearly 77% so far in 2025 as investors gain more confidence in the chipmaker.
A representative for Intel declined to comment.
“AMD does not comment on rumor or speculation,” an AMD spokeperson said.