Will Microsoft Build Their own Server Chips for Azure?

It looks like Microsoft will now be building its own server-chips for Azure, according to a report in Bloomberg.

Microsoft Corp. lured away a veteran semiconductor designer from Apple Inc. as it looks to expand its own server-chips efforts, according to people with knowledge of the matter.

The move suggests that Microsoft is accelerating a push to create homegrown chips for its servers, which power Azure cloud-computing services. The focus on custom chips follows similar efforts by Alphabet Inc.’s Google and Inc., Microsoft’s biggest cloud rivals.

I think the long game here is how well they can leverage their hardware and software together to maximize efficiency.

This also reminds me of what was said in the a16z podcast about Hyperscalers creating programmable chips in an effort to maximize efficiency in their data centers.