Microsoft and Intel strike a deal to manufacture custom chips

Intel will produce custom chips, designed by Microsoft for Microsoft, as part of a deal Intel says is worth more than $15 billion. Intel announced The partnership was announced during today's Intel Foundry event. Although neither company specified what the chips would be used for, Bloomberg Today he noted Microsoft was planning internal designs for both processors and AI accelerators.

“We are in the midst of a very exciting platform transformation that will fundamentally transform productivity for every single organization and the entire industry,” Microsoft CEO Satya Nadella said in the official press release.

The chips will use Intel's 18A process, which has been a big part of its roadmap since the company brought back CEO Pat Gelsinger to shake things up. The company is counting on its chip foundry services to once again put it at the top of the world of chip manufacturing, and it appears that Microsoft will be the first major client for this project.

Relying on the production of others' designs is a playbook that has worked well for rival Taiwan Semiconductor Manufacturing Co. (TSMC), which has lucrative partnerships with companies like Apple, Qualcomm, and AMD. Gelsinger Tell venturebeat today The company's foundry is a big part of its strategy.

Intel's new foundry plans come as more companies seek to produce their own self-designed chips, but still face challenges. Intel recently postponed the opening of a $20 billion chip factory in Ohio to 2026 — originally scheduled to open in 2025 — citing a slow chip market and delays in government grants.