While most people think of Microsoft as the company behind Windows and Xbox, the tech giant has been quietly cooking up something much more ambitious in its labs. The company has gained access to OpenAI’s secret chip designs, and they’re using these blueprints like a master recipe to build their own AI-powered computer chips.
Microsoft is secretly transforming from a software company into an AI chip powerhouse using OpenAI’s classified blueprints.
This partnership isn’t just a handshake deal between friends. Microsoft and OpenAI signed a multi-year agreement in 2019 that gives Microsoft exclusive rights to OpenAI’s chip intellectual property. Think of it like getting the blueprints to build the world’s fastest race car, except these blueprints help create chips that make artificial intelligence work better and faster.
The scale of their plans is mind-boggling. Microsoft wants to deploy up to 10 gigawatts worth of AI chips by 2029, with the first chips rolling out in late 2025. To put that in perspective, that’s enough computing power to run entire cities.
They’re building what they call an AI superfactory, including massive data centers like the Fairwater network that connects sites in Wisconsin and Atlanta. These data centers are packed with hundreds of thousands of powerful graphics processing units, or GPUs, arranged in special 72-GPU server racks. The infrastructure uses advanced liquid cooling systems to manage the massive heat generated by this unprecedented density of computing power. Microsoft retains rights to data center hardware and software as part of their non-Research IP agreement with OpenAI.
These chips work together like a perfectly coordinated orchestra, sharing information at lightning speed to train AI models that can think and respond almost like humans.
Why does Microsoft want to build its own chips instead of buying them from other companies? It’s like learning to cook your favorite meal at home instead of always ordering takeout. Building custom chips gives Microsoft more control over performance and costs while reducing their dependence on outside suppliers.
The financial commitment is enormous, with Microsoft spending $35 billion in the third quarter of 2025 alone on AI-related infrastructure. This massive investment shows how seriously Microsoft takes its silicon ambitions.
OpenAI has also committed to purchasing approximately $250 billion in Microsoft’s Azure cloud services, creating a partnership that benefits both companies as they race to lead the AI revolution.
