Microsoft CTO: Nvidia Rules AI, but AMD Will Compete Soon

Microsoft is at the forefront of the AI arms race as it seeks to scale its cloud operations fast enough to stay ahead of Google, Meta, and other competitors. To do that, it has plenty of GPUs, which puts its CTO in the enviable position of managing that infrastructure scale-out. That means his job is to figure out which hardware Microsoft should use, both now and in the future, making his insight into the industry rather enlightening. He recently revealed his thoughts on how the AI industry is shaping up, stating that although Nvidia is still the leader in hardware, nobody should sleep on AMD's ambitions in the space either.

Microsoft CTO Kevin Scott discussed Microsoft's plans at the recent Code conference sponsored by Vox Media, and he opined on both Nvidia and AMD's current position in the AI market. When asked about the company's rumored plans to develop an accelerator for AI applications, he demurred, stating only that it's making the best choices given the available options. "And the best option that’s been available during the last handful of years has been Nvidia," he stated, according to CNBC.

AMD's upcoming Instinct MI300 is its most ambitious AI chip with a whopping 146 billion transistors. Credit: AMD

These comments are unsurprising since Microsoft is joined at the hip with OpenAI, which uses Nvidia GPUs to power ChatGPT. The company recently infused ChatGPT directly into Windows 11 with its new Copilot technology and has also added some of its features into its Edge browser and Bing search.

Scott also had some kind words for AMD, a Microsoft partner for many years. It uses AMD's custom silicon in its Xbox gaming consoles and its Epyc CPUs for its Azure cloud platform. “They’re making increasingly compelling GPU offerings that I think are going to become more and more important to the marketplace in the coming years,” said Scott, according to CNBC. His comments caused AMD's stock to jump almost 5%.

Scott also said the supply of Nvidia GPUs is beginning to improve, which is breaking news since acquiring these GPUs at scale has bedeviled the entire industry for the past nine months or so. Scott says that as the person in charge of Microsoft's GPU budget, his job has been pretty miserable for the past five years but is now a bit "less terrible." The CNBC report also states that traffic to ChatGPT has declined sequentially in the past three months, but it's unclear if that has impacted the number of Nvidia GPUs available to purchase.