Satya Nadella stepped in to solve big AI ‘chip feud’ between Nvidia and Microsoft over this issue

Microsoft and Nvidia reportedly clashed over AI chip design for months and the issue was resolved after Satya Nadella's intervention. The Information reported that as Nvidia CEO Jensen Huang has maintained a tight control over how chips are allocated and installed, the company had a major fight with Microsoft which is one of its client. The Nvidia CEO earlier explained that the company controls how chips are allocated to prevent tech giants from stockpiling them during periods of limited supply. Owing to this, there were tensions between Microsoft and Nvidia.

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What exactly happened?

As per the report, Nvidia was attempting to not only decide allocation of chips but also installing them within data centres while focusing on the server rack configuration. The company did not like how Microsoft utilised the purchased hardware after which the disagreement escalated into a feud as Nvidia tried to convince Microsoft to adopt its next flagship chip GB200 within the server rack design specified by Jensen Huang's company.

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The way Nvidia wanted chips to be installed could have affected Microsoft's ability to switch to different AI chips, people in the know said as per the report.

What Satya Nadella did amid fight with Nvidia?

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The report claimed that when the dispute was not resolved for several weeks, it reached Microsoft CEO Satya Nadella's desk who solved the issue by making Nvidia to back down on its demands. The report also claimed that Jensen Huang has since been worried about whether companies like Microsoft and Amazon Web Services are going to run out of data centre space.