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Microsoft Azure Chooses Xilinx Chips Over Intel Altera

Microsoft Azure has selected Xilinx, a manufacturer of programmable chips, to work on its cloud unit, replacing Intel Altera who previously had exclusive rights in that area, in more than half of its servers according to a report in The Bloomberg today citing sources who wished to remain anonymous.

Reportedly, Azure will use Xilinx’s programmable chips as co-processors to speed up workloads of large computer networks relieving the main processor in more than half of its servers.

Xilinx is a direct competitor to Altera, who Intel acquired in 2015 for $16.7 billion to produce both general processors in addition to programmable processor chips.

The market for these chips has changed as building and running your own data centres is no longer a trend, with many consolidating much of the hardware market around major cloud vendors in the U.S. and China.

Companies such as Microsoft, Google and Amazon have become massive buyers of server chips and are increasingly searching for alternatives to standard processors to increase the efficiency of their data centres.

This is reflected in earnings reports, with Bloomberg stating that Intel’s programmable chip business had $496 million of sales in the third quarter, which was a gain of 6%. Whereas Xilinx reported an increase in revenue of 19% in its latest quarter.

Xilinx, under CEO Victor Peng, is working to stake its claim in the growing market for data centre components, with Peng stating earlier in the year that data centres are an “area of rapid technology adoption where customers can quickly take advantage of the orders of magnitude performance and performance-per-watt improvement that Xilinx technology enables in applications like artificial intelligence (AI) inference, video and image processing, and genomics,”.

Microsoft and Xilinx have not commented on Bloomberg’s report.

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