Microsoft has an internal goal of amassing 1.8 million AI chips by the end of 2024, according to documents seen by Business Insider.
Microsoft is trying to make generative AI faster, better, and cheaper, but its efforts rely heavily on Microsoft buying chips and graphics processing units primarily from its designer, Nvidia.
The document suggests that Microsoft plans to triple the number of its GPUs in 2024.
The company has partnered with OpenAI to be at the forefront of the generative AI boom. Staying at the cutting edge of this field is expensive.
Future spending is $100 billion
Microsoft expects to spend about $100 billion on GPUs and data centers between this fiscal year and 2027, two people familiar with the plans told BI.
Microsoft spokesman Frank Shaw declined to comment, citing the standard quiet period that publicly traded companies must observe before reporting earnings. The company plans to announce results within the next few days.
Other tech giants are also building huge GPU stores. This is one reason why Nvidia is now worth more than $2 trillion. Meta CEO Mark Zuckerberg said earlier this year that the social media company plans to buy about 350,000 Nvidia H100 GPUs in 2024 and have about 600,000 equivalent chips by the end of the year. He said he plans to keep it.
Nvidia recently announced its newest and fastest GPU, Blackwell. Next, Nvidia’s H100 is already one of the most powerful GPUs on the market, with an estimated price of around $30,000.
BI recently obtained another document revealing that Microsoft delivered “record levels of GPU power” in the second half of last year, but no specific numbers were mentioned.
Analysts at DA Davidson estimate that Microsoft spent $4.5 billion on Nvidia chips last year, and one Microsoft executive told BI that this figure was within the ballpark of actual spending.
Microsoft has an internal effort to design its own AI chips to reduce its dependence on Nvidia, but the company is years behind Nvidia and the cutting-edge technology advances so quickly that Department employees are skeptical.
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