Microsoft Stock Jumps as Company Aims to Boost AI Chip Production

Microsoft's stock price hit its highest level this year after the company announced plans to boost production of AI chips. The tech giant is negotiating with Taiwan Semiconductor Manufacturing Co. (TSMC) to secure capacity for over 300,000 Maia 300 units targeted for delivery in 2027.

The move aims to counter rising infrastructure costs and reduce Microsoft's dependence on Nvidia Corp (NVDA). Microsoft has been attempting to woo high-profile external customers, including ongoing discussions with Anthropic. The company wants to drastically scale up its in-house hardware capabilities to support the rollout of the Maia 300 chip.

The projected production target marks a steep increase from the tens of thousands of Maia 200 chips produced to date. Microsoft's general manager for Azure Maia, Andrew Wall, declined to confirm specific volume figures but emphasized the long-term vision. He stated that the company expects its Azure Maia deployments to support AI workload demand measured in gigawatts.

The economic rationale behind the transition is central to Microsoft's strategy. Running OpenAI and internal AI models on Maia 200 processors reduces operational costs by 30% to 40% compared to top-of-the-line Nvidia hardware. This is a crucial aspect of Microsoft's push into custom hardware, as the company currently lags behind hyperscale peers such as Amazon.com Inc. and Alphabet Inc.'s Google.