Microsoft (MSFT) has outpaced its big-tech rivals, buying twice as many Nvidia (NVDA) graphic processing units (GPUs) this year. The news was reported by Financial Times, citing research by technology consulting firm Omdia. According to Omdia, Microsoft purchased roughly 485,000 of Nvidia’s advanced Hopper chips to strengthen its artificial intelligence (AI) infrastructure systems.
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Microsoft’s purchase of Nvidia chips this year more than tripled over its 2023 orders. The company is buying these chips to operate its own Copilot assistant services as well as rent out through its Azure Cloud segment. Building a state-of-the-art data infrastructure requires huge capital infusion and time due to its complexity. Hence, Microsoft is building up its inventory of advanced chips to prepare for its future needs.
Other Big Tech Giants Buy Nvidia Chips for AI Infrastructure
According to Omdia‘s research, Meta Platforms (META) was the second-largest buyer, acquiring 224,000 Hopper chips. Meanwhile, Amazon (AMZN) and Alphabet’s (GOOGL) Google purchased 196,000 and 169,000 Hopper chips, respectively. Similarly, Chinese tech companies ByteDance and Tencent each bought 230,000 Nvidia chips, including their lower version of H20 models this year. These chips were modified by Nvidia to comply with U.S. export restrictions after the Biden Administration banned the export of advanced chips to China.
In addition to these developments, Microsoft is also one of the largest investors in ChatGPT maker OpenAI. The company’s increased investment in Nvidia’s chips positions it at the forefront of the next-generation AI infrastructure race. Big tech companies globally are making massive capital expenditures in the AI space. According to Omdia, MSFT is expected to spend $31 billion on AI this year, with the overall industry spend being somewhere close to $229 billion. Even early-stage startups, such as Elon Musk’s xAI, are expending big on computing power.
Meanwhile, Nvidia, undoubtedly, remains at the center stage of the AI boom, with its GPUs claiming a 43% of server spends in 2024, the report added. At the same time, rival AMD (AMD) is also making a big comeback in the server space. In 2024, Microsoft and META also bought 96,000 and 173,000 of AMD’s MI300 chips, respectively. At the same time, they are stepping up efforts to build their own chips. For instance, Google’s TPUs (tensor processing units), Meta’s Training and Inference Accelerator chip, and Amazon’s Trainium chips are all being deployed in a big way toward cloud computing operations. Also, Microsoft is deploying its Maia chips along with Nvidia’s chips to offer best in class services to customers.
Here’s how the big tech companies compare on the TipRanks Stock Comparison tool.
