Sources familiar with the story asked to not be named at the moment, but the news shouldn't come as a shock to most following Microsoft in recent years. That is to reduce reliance on using Intel chip technology.
However, that would not be the case shortly as the design would power Microsoft's main bread and butter, its servers, and data centers which connect its Windows OS platform and products to users globally.
Now Microsoft has joined firms like Apple in designing its own custom Arm-based chip.
At present, Microsoft uses Arm-based chips from Qualcomm in some of their surface PCs.
In addition, the company is thinking about using proprietary processors in devices of the Surface family.
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Intel's Xeon range of server chips now power most of the machinery at the heart of the internet and corporate networks, generating the company's most profitable source of revenue. As Apple, another major software and hardware maker, has already done the same.
Only about a month ago, Apple kicked off a wave of new Macs, led by the new MacBook Pro, ditching Intel for in-house custom silicon. It has also apparently been looking to move away from Intel for a while. The chip has been reviewed and a lot of those reviewers are happy with its performance and battery life.
"Given the growth of our datacenters we are always investigating in new hardware and software solutions to meet our scale and customer demand".
"Our partnership in this world, from OpenAI initiatives, to our relationship with Intel and Arm upgrades, certainly points to the need to have advanced capabilities, whether we create it as a first party or as an ecosystem". Another advantage of the M1 chip is that its integration with Apple's software is almost ideal.
This does not bode well for Intel. Usually, when one does something, others tend to follow. The server chips are the top priority for Microsoft and the one which would likely be produced by the company instead of the Surface chips for its laptop computers.