In addition to vying for the title of the world's most valuable company, Microsoft and Nvidia have reportedly been at odds for months over AI chip designs, a dispute that eventually reached Microsoft CEO Satya Nadella, who intervened to settle the matter.
According to a report from The Information, Nvidia CEO Jensen Huang is tightly controlling how the company's customers, including Microsoft, allocate and install its chips.
Nvidia's CEO previously explained that the company was dictating how chips were allocated to prevent companies from stockpiling at a time of limited supply, but this control reportedly sparked disagreements with Microsoft. Tensions had reportedly been building behind the scenes for months.
Why tensions have risen between Microsoft and NVIDIA
Nvidia's efforts to control chip allocations have reportedly gone beyond simply deciding who receives chips, and have also sought to dictate how those chips are installed within data centers, with a particular focus on the configuration of server racks.
This additional control over how Microsoft uses the hardware it buys has allegedly led to a feud between the two tech giants.
The report further details that the disagreement escalated into a fight when NVIDIA tried to convince Microsoft to adopt its upcoming flagship chip, the GB200, within NVIDIA-specified server rack designs.
What does this mean for Microsoft?
Installing Nvidia's chips the way it wanted them may have hindered Microsoft's ability to switch to a different AI chip, according to a report that arrived on Microsoft CEO Satya Nadella's desk after a dispute over server racks went unresolved for weeks, according to people familiar with the matter.
According to the Information, Microsoft ultimately won the case after NVIDIA backed down and agreed to the demands of the major tech companies.
Nvidia's CEO is reportedly worried that companies like Microsoft and Amazon Web Services will run out of data center space, which would lead to lower sales of AI chips.
According to a report from The Information, Nvidia CEO Jensen Huang is tightly controlling how the company's customers, including Microsoft, allocate and install its chips.
Nvidia's CEO previously explained that the company was dictating how chips were allocated to prevent companies from stockpiling at a time of limited supply, but this control reportedly sparked disagreements with Microsoft. Tensions had reportedly been building behind the scenes for months.
Why tensions have risen between Microsoft and NVIDIA
Nvidia's efforts to control chip allocations have reportedly gone beyond simply deciding who receives chips, and have also sought to dictate how those chips are installed within data centers, with a particular focus on the configuration of server racks.
This additional control over how Microsoft uses the hardware it buys has allegedly led to a feud between the two tech giants.
The report further details that the disagreement escalated into a fight when NVIDIA tried to convince Microsoft to adopt its upcoming flagship chip, the GB200, within NVIDIA-specified server rack designs.
What does this mean for Microsoft?
Installing Nvidia's chips the way it wanted them may have hindered Microsoft's ability to switch to a different AI chip, according to a report that arrived on Microsoft CEO Satya Nadella's desk after a dispute over server racks went unresolved for weeks, according to people familiar with the matter.
According to the Information, Microsoft ultimately won the case after NVIDIA backed down and agreed to the demands of the major tech companies.
Nvidia's CEO is reportedly worried that companies like Microsoft and Amazon Web Services will run out of data center space, which would lead to lower sales of AI chips.
