Microsoft’s Race to Become a Leader in Generative AI: The High Cost and Future Spending Plans

Microsoft is working hard to become a leader in generative AI by setting an internal target to accumulate 1.8 million AI chips by the end of 2024. The company is investing heavily in this area, with plans to triple the number of GPUs it has by 2024, primarily from Nvidia. However, staying ahead of the competition in this field comes at a high cost, with Microsoft estimating around $100 billion in future spending on GPUs and data centers from the current fiscal year until 2027.

While Microsoft is focused on making generative AI faster, better, and cheaper, some employees are skeptical about the company’s ability to reduce its reliance on Nvidia. With the fast-paced advancements in AI technology, staying competitive requires constant innovation and investment. Other major tech companies are also stockpiling GPUs, contributing to Nvidia’s impressive valuation of over $2 trillion. Meta’s CEO announced plans to purchase hundreds of thousands of Nvidia H100 GPUs in 2024.

Microsoft is not commenting on these details during a quiet period public companies must follow before reporting earnings. However, Business Insider has learned that Microsoft is planning to partner with OpenAI to develop new AI technologies. This partnership could help Microsoft reduce its reliance on Nvidia and stay ahead of the competition in this field.

As Microsoft continues to push the boundaries of AI, employees and insiders with valuable insights are encouraged to share their perspectives with Business Insider. Those willing to contribute can contact Ashley Stewart via email or secure message for further discussion.