Microsoft's Next-Gen AI Chip Still Lags Nvidia's Blackwell, Postpones Launch

Microsoft Corp. MSFT postponed the commercialization of its in-house next-gen artificial intelligence chip, Maia (code-named Braga), by at least six months from 2025 to 2026 due to unexpected changes to its design and staffing constraints.

There were also concerns over the chip lagging behind Nvidia Corp.’s NVDA Blackwell chip that hit the market in 2024, Reuters reported on Friday, citing the Information.

Microsoft introduced the Maia chip in November 2023, but unlike its competitors, the company has struggled to ramp up production.

Also Read: Microsoft’s New AI Lab Powers Wisconsin Manufacturing

Cloud rivals like Amazon.Com AMZN (with its Trainium3 chip) and Alphabet Inc.’s Google GOOGL GOOG (with its Tensor Processing Units) have made more significant strides in in-house chip development and deployment.

These advancements by rivals underscore the intense competition among tech giants to develop custom AI processors, aiming to optimize performance and reduce reliance on external suppliers like Nvidia, thereby reducing costs.

In 2024, Microsoft reportedly purchased close to 485,000 Nvidia “Hopper” AI chips, beating Meta Platforms META, which procured 224,000 chips.

For context on Nvidia’s dominant position and financial performance, the company reported first-quarter revenue of $44.1 billion, up 69% year-over-year and up 12% from the fourth quarter.

The revenue beat a Street consensus estimate of $43.2 billion. Nvidia faced an export ban on H20 products to China on April 9, prompting it to book a $4.5 billion charge in the first quarter.

Still, Nvidia guided for second-quarter revenue of $45.0 billion, +/- 2%. The guidance includes the loss of $8.0 billion in H20 revenue due to the export controls.

Barclays projected Nvidia to reach a market cap of $5 trillion backed by AI market leadership, growing opportunities in sovereign AI, and the Blackwell AI platform.

In June, Nvidia overtook Microsoft to become the world’s most valuable publicly traded company, with a market cap of $3.4 trillion.

Price Actions: MSFT stock is trading higher by 0.10% to $497.98 at last check Friday. NVDA is up 1.49%.

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