Microsoft’s technology chief, Kevin Scott, has revealed that the company is finally getting easier access to Nvidia’s chips for artificial intelligence (AI) workloads. Speaking at the Code Conference, Scott stated that the market for Nvidia’s graphics processing units (GPUs) is starting to open up. The demand for these GPUs has been high since OpenAI launched the ChatGPT chatbot last year, causing a scarcity of supply. However, Scott mentioned that the situation is improving gradually, with more good news to come.
Nvidia, which controls a significant portion of the AI chip market, expects a 170% revenue growth this quarter compared to the previous year. The company’s gross margin has also increased from 44% to 70% in just a year. Microsoft, like other tech giants, has been incorporating generative AI into its own products and offering AI capabilities to clients. But the reliance on Nvidia’s GPUs for training and deploying AI models has created supply chain challenges.
Scott admitted that controlling the GPU budget across Microsoft has been a terrible job for the past five years. However, he expressed that it’s become easier since generative AI technologies have become less new and more widespread. Nvidia is expected to increase its supply of GPUs each quarter until next year, according to the company’s finance chief.
Despite the positive development with Nvidia’s GPUs, traffic to the ChatGPT chatbot has declined for the past three months. This may be due to Microsoft’s Azure cloud-computing services offering access to OpenAI. Additionally, Microsoft plans to begin selling access to its Microsoft 365 Copilot in November to large organizations with productivity software subscriptions.
Scott did not directly address the reports about Microsoft developing its custom AI chip, but he did mention the company’s significant investment in in-house silicon work. Microsoft has previously collaborated with Qualcomm on an Arm-based chip for Surface PCs. Scott emphasized that Microsoft strives to make the best choices when building systems, utilizing available options. Nvidia has been the best option in recent years, but it remains to be seen if Microsoft will explore other alternatives.
In conclusion, Microsoft’s technology chief, Kevin Scott, revealed at the Code Conference that the company is finally experiencing improved access to Nvidia’s GPUs for AI workloads. The supply chain challenges that arose due to the high demand for GPUs after the launch of OpenAI’s ChatGPT are slowly resolving. Nvidia expects to increase its supply each quarter through next year. Despite this positive development, traffic to the ChatGPT chatbot has declined in recent months. Microsoft also has plans to sell access to its Microsoft 365 Copilot to large organizations in November. The situation with Microsoft’s custom AI chip remains unclear, but the company has made significant investments in in-house silicon work. The future of AI technology and its impact on Microsoft’s products and services remains an intriguing prospect.
What are your thoughts on Microsoft’s improved access to Nvidia’s GPUs? Do you think Microsoft should explore other alternatives? Share your opinions in the comments below!
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