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Shares of chip makers
Intel
and Advanced Micro Devices received a late blow Friday on a report that
Microsoft
working on developing its own microprocessors for servers used in their Azure cloud service and possibly for their Surface PCs.
Bloomberg reports that Microsoft is using designs based on Army technology to build a processor for use in its data centers, and that the company is also considering building another chip for Surface devices. Army owns SoftBank (SFTBY), which has agreed to sell the business to
Nvidia
(NVDA).
The story notes that the movement follows a similar effort with
Amazon.com
(AMZN) and other companies with large server farms.
Apple
(AAPL) recently announced the first MacBook Air and MacBook Pro laptops with processors designed internally and based on Army technology.
“As silicon is the foundation for technology, we continue to invest in our own capabilities in areas such as design, manufacturing and machinery, while also nurturing and strengthening partnerships with a wide range of technology. chip providers, ”said Microsoft spokesman Frank Shaw. in a statement.
Neither Intel nor AMD immediately responded to a request for comment.
Patrick Moorhead, an analyst with Moor Insights & Strategy, noted that there is “heating competition” in the cloud infrastructure market, adding that it would not be surprising to see a move by Microsoft to catch up with Web Services Amazon. “Silicon is strategic, not a commodity, and the industry was finally awakened,” he said.
Intel on Friday fell 6.3% to $ 47.46, while Advanced Micro Devices fell 1% to $ 95.952, after trading as low as $ 93.56. Microsoft shares fell 0.4%, to $ 218.59.
Write to Eric J. Savitz at [email protected]