Microsoft has unveiled its third-generation AI chip, the Maia 300, signaling a shift in its strategy to rely more on its own hardware for AI inference. The company plans to ramp up production of Maia chips starting in 2027, aiming to make them the primary system for running AI in its products. Despite this move, Microsoft continues to be a major customer of Nvidia, with CEO Satya Nadella highlighting plans to deploy Nvidia's next-generation Vera Rubin systems.
Nvidia's revenue has surged significantly since the launch of Microsoft's first Maia chip in late 2023. The company reported fiscal second-quarter 2027 revenue of $96.2 billion, up 106% year over year. Sales to hyperscale customers, which include major cloud providers like Microsoft, more than doubled to $48.7 billion. Nvidia's growth shows no signs of slowing, with guidance pointing to around 89% growth in the next quarter and a 70% revenue increase expected for fiscal 2028.
While Microsoft's Maia chips could potentially reduce Nvidia's market share, the impact may be limited. Nvidia's sales to other data center customers, such as AI cloud providers and governments, grew 138% year over year. CEO Jensen Huang described Nvidia's product as an 'entire AI factory platform' that can be used across various clouds, suggesting that custom chips like Maia are more specialized.
Nvidia's stock is trading at around $226, roughly 14 times next fiscal year's expected earnings. This valuation is considered attractive for a company still guiding for high growth. Despite Microsoft's in-house chip development, Nvidia remains a dominant player in the AI chip market, making it a compelling investment option.