Advanced Micro Devices Inc (NASDAQ:AMD) shares climbed Thursday afternoon, rising by over 7%. Gains accelerated following a story from Bloomberg that said Microsoft (NASDAQ:MSFT) is helping finance AMD’s expansion into AI chips.
Microsoft and AMD have teamed to create an alternative to Nvidia (NASDAQ:NVDA) processors for artificial intelligence, the report said, citing people with knowledge of the matter. Microsoft will provide financial support to bolster AMD’s efforts, as it works with the chipmaker on a homegrown Microsoft processor for AI workloads. The plan is part of a multi-pronged strategy by Microsoft to secure more of the components.
Microsoft’s chip project is code-named Athena, and it already has several hundred employees working on it and has spent about $2 billion. Previous reports suggested Microsoft was working with Taiwan Semiconductor (NYSE:TSM) on project Athena.
Microsoft will continue to work closely with Nvidia, which dominates the field, and is also trying to find ways to get more Nvidia processors amid shortages, Bloomberg noted.
Microsoft has a deep relationship with ChatGPT parent OpenAI, and has already introduced a chat version of Bing, along with AI-enhanced Office tools.