Microsoft has partnered with chipmaker Arm Holdings on two custom-built chips to power AI and cloud-based systems.

The new chips will power the tech giant’s Azure Maia AI Accelerator, which is optimised for AI and Generative AI tasks, and the Microsoft Azure Cobalt CPU, an Arm-based processor tailored to run general purpose compute workloads on the Microsoft Cloud.

Microsoft said the chips represented a “last puzzle piece” for it to deliver infrastructure systems – which include silicon choices, software and server, racks and cooling systems – that have been designed from top to bottom and can be optimised with internal and customer workloads in mind.

The chips will start to roll out early next year to Microsoft’s datacentres, initially powering the company’s services such as Microsoft Copilot or Azure OpenAI Service.

“Microsoft is building the infrastructure to support AI innovation, and we are reimagining every aspect of our datacentres to meet the needs of our customers,” said Scott Guthrie, executive vice president of Microsoft’s Cloud + AI Group. “At the scale we operate, it’s important for us to optimise and integrate every layer of the infrastructure stack to maximise performance, diversify our supply chain and give customers infrastructure choice.”

Arm Holdings recently reported a 28 per cent profit increase in the second quarter of its financial year ended 30 September.

However, the Cambridge-based chipmaker’s shares also briefly dipped after it forecast third quarter revenues lower than analysts’ expectations.

---