Microsoft’s $100 Billion AI Bet: The Race to Become a Generative AI Leader

Microsoft is determined to become a leader in generative AI by 2024, as evidenced by its internal target of accumulating 1.8 million AI chips. The company’s focus is on making AI faster, better, and cheaper, with a significant reliance on purchasing GPUs primarily from Nvidia. By the end of 2024, Microsoft aims to triple the number of GPUs it has, with plans already underway in partnership with OpenAI.

The cost of remaining competitive in the generative AI market is high, with Microsoft estimating around $100 billion in future spending on GPUs and data centers from the current fiscal year until 2027. Despite this significant investment, Microsoft declined to comment on these details citing a quiet period public companies must follow before reporting earnings.

Meta’s CEO has also announced plans to purchase hundreds of thousands of Nvidia H100 GPUs in 2024. Meanwhile, Nvidia continues to innovate with its latest GPU, the Blackwell and powerful H100s already on the market.

Microsoft’s employees are skeptical about its ability to reduce its reliance on Nvidia by internally designing AI chips given that it lags behind Nvidia in this area. With rapid advancements in AI technology staying competitive requires constant innovation and investment.

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