Microsoft and Nvidia have been locked in a battle over AI chip design, with tensions reportedly escalating to the point where Microsoft CEO Satya Nadella had to step in to resolve the dispute. The conflict stemmed from Nvidia’s tight control over how its customers, including Microsoft, allocate and install chips.
Nvidia CEO Jensen Huang’s control over chip allocation, which is aimed at preventing companies from stockpiling chips during periods of limited supply, reportedly led to disagreements with Microsoft. These tensions had been brewing behind the scenes for some time before coming to a head.
The heart of the dispute lies in Nvidia’s alleged attempts to not only decide who receives chips but also to dictate how these chips are installed in data centers, particularly in server rack configuration. This extra layer of control over how Microsoft used the purchased hardware sparked the disagreement between the two tech giants.
The situation escalated when Nvidia pushed Microsoft to adopt its upcoming flagship chip, the GB200, within the server rack design specified by Nvidia. However, this installation method may have constrained Microsoft’s ability to switch to different AI chips in the future, potentially limiting their technological flexibility.
As negotiations over the server rack design remained unresolved for several weeks, the issue eventually landed on the desk of Microsoft CEO Satya Nadella. Ultimately, Microsoft emerged victorious as Nvidia relented and agreed to meet the tech giant’s demands, as reported by The Information.
Nvidia’s CEO reportedly expressed concerns over the potential space constraints faced by companies like Microsoft and Amazon Web Services in their data centers. The fear is that a shortage of space could lead to lower sales of AI chips, highlighting the significance of the dispute between Microsoft and Nvidia over chip allocation and installation.
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https://timesofindia.indiatimes.com/technology/tech-news/how-ceo-satya-nadella-may-have-been-the-key-in-solving-nvidia-microsoft-ai-chip-feud/amp_articleshow/111195779.cms