Sources: Microsoft is working on in-house designs for chips to run its cloud servers and Surface PCs
like Apple SiliconSteve Troughton-Smith / @stroughtonsmith : ARM Windows machines exist today; they're slow, have vast software incompatibilities (currently) and sluggish emulation of legacy apps, offer few benefits outside of battery life, and they mate nowhere near as well as macOS does with Apple Silicon. It's a hedge more than a threat Martin Sfp Bryant / @martinsfp : Another blow to Intel. Microsoft is designing its own Arm-based chips for servers and Surface PCs. https://www.bloomberg.com/... Steve Troughton-Smith / @stroughtonsmith : Reminder: ARM Macs are so successful because they have Apple silicon inside them, & all that entails, not because they have an ARM CPU instead of Intel. A decade of industry-leading chip design & scale, plus the kind of full-stack control & optimization others only dream of Max Weinbach / @maxwinebach : YES! https://twitter.com/... Tom Warren / @tomwarren : Microsoft is reportedly designing its own ARM-based processors for Surface PCs and servers. Uh oh Intel. Details here: https://www.theverge.com/... https://twitter.com/... Shahin Farshchi / @farshchi : Chips are going from components to DIFFERENTIATORS. Expect more hyperscalers, gadget companies, and car companies to take Microsoft, Google, Intel, Tesla, and Apple's lead in building in-house. https://twitter.com/... Steve Burns / @sjosephburns : Intel falls on report Microsoft plans to design own chips for PCs and servers: @CNBC $INTC https://twitter.com/... @cnbc : Intel falls on report Microsoft plans to design own chips for PCs and servers https://www.cnbc.com/... Aditya Sood / @adityasood : TIRED: Hardware WIRED: Software INSPIRED: Hardware https://twitter.com/... @business : BREAKING: Microsoft is working on in-house designs for chips to run its cloud servers and Surface PCs, the latest tech giant to reduce reliance on Intel's technology https://www.bloomberg.com/... https://twitter.com/...
Bloomberg
Context & Ripple Effects
This report lands mid-arc rather than at the start. Microsoft had already spent years loosening Intel's grip on Azure: it began testing Windows Server on ARM with Qualcomm and Cavium processors back in 2017, then moved more than half of Azure's co-processor workloads onto Xilinx chips in 2018. Designing silicon in-house is the logical next step after renting alternatives.
The comparison hanging over the story is Apple Silicon, whose launch showed that a first-party Arm chip could carry a mainstream PC line — though analysts quoted here caution that ARM Windows machines remain slow, emulation-heavy hedges rather than Mac-class integrations. The later reveals bear out the server side of the bet: Microsoft shipped the Maia 100 AI accelerator and Cobalt server chip, and eventually committed a future design to Intel's 18A manufacturing process.
First-order effects
Intel's most important customer segment — hyperscale cloud operators — now includes Microsoft designing its own server CPUs, directly eroding the exclusive x86 relationship that Azure previously ran on.
Surface gains a path to first-party Arm silicon, giving Microsoft the same hardware-software vertical control Apple exercises with Apple Silicon, even if early Arm Windows machines trade performance for battery life.
Second-order effects
Arm server partners like Qualcomm and Cavium risk being disintermediated: once Microsoft internalizes the design work their 2017 partnership seeded, the merchant Arm server vendors become optional.
Other hyperscalers face pressure to match in-house silicon to defend cloud margins, accelerating the shift of chip demand from merchant CPU vendors toward custom designs and contract manufacturers.
Third-order effects
If the pattern holds — pilot with partner silicon, then co-processors, then full in-house designs — the server industry restructures around vertically integrated compute, with merchant CPU vendors competing for fab slots (as Intel's foundry pitch shows) rather than guaranteed sockets.
PC differentiation increasingly splits along the same line Apple opened: first-party Arm systems with tight software integration versus emulated legacy compatibility, forcing Microsoft to solve the Windows-on-Arm software gap or keep Arm Surface a niche hedge.
The trend: Hyperscalers are moving from buying commodity server chips to designing workload-specific silicon of their own, converting compute from a procurement decision into a strategic capability.
SCOOP Microsoft is working on its own ARM-based chip designs for server and Surface in a new threat to Intel's dominance: https://www.bloomberg.com/... and more details on @TheTerminal by @ianmking and me
I see this more as an “and” than an “instead of.” No doubt Azure, much like AWS will go down this road but it isn't Armageddon for x86 or Intel. Silicon and #cloud scale is massive. $INTC $MSFT #Tech https://twitter.com/...
From MSFT's Frank Shaw: “Because silicon is a foundational building block for technology, we're continuing to invest in our own capabilities in areas like design, manufacturing and tools, while also fostering and strengthening partnerships with a wide range of chip providers.”
Microsoft should just partner with Samsung, who's not only building processors, but also fabbing them too. They also have the same enemy: Apple. https://twitter.com/...
To paraphrase Oprah “you build a system on a chip, and you build a system on a chip. Everybody make a system on a chip.” https://twitter.com/... https://twitter.com/...
Server & Azure is another matter, but for Windows on ARM to be a threat to Intel in PCs, it needs to match or exceed Intel's perf without cranking the TDP back up to Intel levels, and it needs to run most Windows software as good as or better than on Intel — like Apple Silicon
ARM Windows machines exist today; they're slow, have vast software incompatibilities (currently) and sluggish emulation of legacy apps, offer few benefits outside of battery life, and they mate nowhere near as well as macOS does with Apple Silicon. It's a hedge more than a threat
Reminder: ARM Macs are so successful because they have Apple silicon inside them, & all that entails, not because they have an ARM CPU instead of Intel. A decade of industry-leading chip design & scale, plus the kind of full-stack control & optimization others only dream of
Microsoft is reportedly designing its own ARM-based processors for Surface PCs and servers. Uh oh Intel. Details here: https://www.theverge.com/... https://twitter.com/...
Chips are going from components to DIFFERENTIATORS. Expect more hyperscalers, gadget companies, and car companies to take Microsoft, Google, Intel, Tesla, and Apple's lead in building in-house. https://twitter.com/...
BREAKING: Microsoft is working on in-house designs for chips to run its cloud servers and Surface PCs, the latest tech giant to reduce reliance on Intel's technology https://www.bloomberg.com/... https://twitter.com/...