Microsoft Reportedly Delays Next-Gen AI Chip Launch As It Struggles To Match Nvidia Performance
Synopsis
The launch of Microsoft's Maia AI chip, codenamed Braga, may get pushed back to 2026 due underperformance as compared to Nvidia’s Blackwell chips.
Microsoft Corp.(MSFT) reportedly expects the launch of its next-generation AI chip, codenamed Braga under the Maia project, to be delayed by at least six months from its original 2025 timeline to 2026.
According to a report by The Information as cited by Reuters, the delay stems from unexpected design changes, staffing shortages, and high turnover, as well as performance concerns compared to Nvidia’s (NVDA) benchmark Blackwell chip.
Following the news, Microsoft stock inched lower by 0.04% in Friday morning trade despite broader market strength as the S&P 500 hit a record high.
Microsoft intended to launch the Braga chip within its data centers this year to lessen reliance on costly Nvidia GPUs, according to the report.
The delay adds to the trials of the tech giant, which has fallen behind cloud competitors such as Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOGL), both of which have introduced their own AI processors, Trainium3 and the seventh-generation Tensor Processing Units, respectively.
Changes in the design and issues within the development team were said to be the primary reasons behind the delay.
The Maia 100 chip was explicitly developed for cloud-based AI tasks, leveraging Microsoft’s experience in handling demanding, large-scale AI operations like Microsoft Copilot.
It ranks among the largest processors manufactured using TSMC’s 5nm process and sophisticated packaging methods.
On Wednesday, Wedbush analyst Daniel Ives highlighted that Microsoft is intensifying its focus on monetizing AI through its cloud platform, simultaneously expanding its data center infrastructure to align with scaling principles and leverage the increasing demand.
The analyst projected that widespread adoption of Copilot among Microsoft’s clients could contribute an additional $25 billion to the company’s revenue by fiscal 2026.
On Stocktwits, retail sentiment toward Microsoft remained in ‘neutral’ territory amid ‘high’ levels of chatter.
Microsoft stock has gained over 17% year-to-date and over 9% in the last 12 months.
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