Desktop Mobile
Artificial Intelligence (AI)

Microsoft Buys 485,000 Nvidia AI Chips

Ken Metral

Ken Metral

— 2 min read
Microsoft Buys 485,000 Nvidia AI Chips
Credit: Microsoft Corporation

Microsoft has reportedly acquired nearly twice as many Nvidia AI chips as its closest competitors, underscoring its aggressive push to dominate the AI arena, particularly through its Azure cloud platform.

What Happened?

According to analysts at Omdia, Microsoft purchased approximately 485,000 Nvidia “Hopper” AI chips in 2024. This figure is nearly double what Meta acquired, with Meta reportedly purchasing 224,000 chips.

Other major players like ByteDance and Tencent are also ramping up their investments, each securing 230,000 Nvidia chips, including models like the H20 tailored for the Chinese market.

The Race for AI Dominance

The surge in demand for Nvidia’s GPUs began with the introduction of ChatGPT, driving tech giants to invest heavily in AI infrastructure.

  • Microsoft’s $13 billion investment in OpenAI has been a key driver of its AI strategy, as it looks to expand both its internal AI capabilities and its Azure customer offerings.
  • Despite developing its own AI accelerators, Microsoft continues to rely heavily on Nvidia’s technology to maintain its competitive edge.

Why This Matters

Microsoft’s massive acquisition highlights two key themes:

  1. Strategic AI Infrastructure Expansion: Microsoft’s commitment to AI innovation is evident in its investment scale, positioning Azure as a leader in AI-powered cloud services.
  2. Nvidia’s Market Dominance: Nvidia remains the clear leader in AI semiconductor technology. Its third-quarter earnings underscore this, with $35.1 billion in total revenue, of which $30.8 billion came from data center sales.

Jim Cramer of CNBC emphasizes that no competitor can match Nvidia’s technological capabilities at present.

Challenges Ahead

While Nvidia’s chips remain essential to AI development, challenges persist:

  • Overheating Issues: Some of Nvidia’s Blackwell AI chips have faced overheating problems, impacting operations at Microsoft, Meta, and other companies.

Despite these hurdles, the demand for Nvidia’s GPUs shows no signs of slowing, as companies like Microsoft push forward to scale their AI capabilities.

The Takeaway

Microsoft’s acquisition of Nvidia chips highlights its aggressive strategy to lead in AI innovation. By doubling its GPU investments compared to competitors, Microsoft solidifies its position as a frontrunner in AI infrastructure while Nvidia cements its role as the backbone of AI advancements worldwide.

As the AI arms race accelerates, one thing is clear: the future belongs to companies willing to make bold, strategic investments.

Read more