Microsoft Releases Powerful New AI Chip to Take on Nvidia
Summarize this article with:
By Danny Vena, CPA – Jan 27, 2026 at 2:57PM ESTKey PointsMicrosoft just announced the debut of its latest homegrown chip, the Maia 200.The AI-centric processor delivers both performance and efficiency for cloud-based AI inference. While the chip will likely pad Microsoft's bottom line, it probably won't make a dent in Nvidia's data center dominance. CEO says this is worth 18 Nvidias. Will this make the world's first trillionaire? ›NASDAQ: MSFTMicrosoftMarket Cap$3.5TToday's Changeangle-down(2.23%) $10.50Current Price$480.78Price as of January 27, 2026 at 3:42 PM ETThe software giant is vying for a bigger piece of the AI pie.There's no denying that Nvidia's (NVDA +1.44%) graphics processing units (GPUs) are tops when it comes to artificial intelligence (AI) processing. Unfortunately, being the king of the hill means there's always someone trying to take your crown. Microsoft (MSFT +2.23%) just announced the debut of a powerful new AI chip, the latest move in the company's bid to become a greater force in the AI landscape. Image source: Microsoft. A chip off the old block In a blog post released on Monday, Scott Guthrie, Microsoft's executive vice president of Cloud + AI, introduced Maia 200, the company's latest chip designed specifically for AI inference. He calls Maia "a breakthrough inference accelerator engineered to dramatically improve the economics of AI token generation." The Maia 200 has more high-bandwidth memory, offering three times the performance of Amazon's (AMZN +2.65%) third-generation Trainium chip and above that of Alphabet's (GOOGL +0.58%) (GOOG +0.62%) seventh-generation Ironwood Tensor Processing Unit (TPU). Guthrie called Maia "the most performant, first-party silicon from any hyperscaler." The processor provides both performance and bang for the buck, being "tailored for large-scale AI workloads while also delivering efficient performance per dollar." Maia also includes a reconfigured memory system designed to prevent bottlenecks when feeding data into the AI model. It's also Microsoft's most efficient inference chip "ever deployed, with 30% better performance per dollar" than similarly priced alternatives. ExpandNASDAQ: MSFTMicrosoftToday's Change(2.23%) $10.50Current Price$480.78Key Data PointsMarket Cap$3.5TDay's Range$473.13 - $482.8552wk Range$344.79 - $555.45Volume1.2MAvg Vol25MGross Margin68.76%Dividend Yield0.72% One of the most significant benefits for Microsoft is that the Maia 200 has been designed to provide peak efficiency when powering Copilot and Azure OpenAI. It is also being deployed to data centers running Microsoft 365 Copilot and Foundry, the company's cloud-based AI offerings. By using its homegrown AI chips, Microsoft is working to reduce the cost of running AI workloads amid pressure to contain rising energy outlays. Microsoft said there would be "wider customer availability in the future" for the Maia 200, unlike the previous version, which was never made available to the public. To that end, the company is making its Software Development Kit (SDK) available to developers, AI start-ups, and academics, hoping to give customers a reason to switch. Will Maia "chip" away at Nvidia's lead? Maia is the latest in a string of chips released by Nvidia's rivals to decrease their dependence on its GPUs. Despite rising competition, Nvidia still maintains a dominant 92% share of the data center GPU market, according to IoT Analytics. While Maia may offer benefits for running Microsoft's inference workloads, Nvidia's GPUs still provide the greatest degree of computational horsepower and the flexibility needed to run both inference and AI training. ExpandNASDAQ: NVDANvidiaToday's Change(1.44%) $2.68Current Price$189.15Key Data PointsMarket Cap$4.5TDay's Range$185.71 - $190.0052wk Range$86.62 - $212.19Volume3.4MAvg Vol186MGross Margin70.05%Dividend Yield0.02% That said, if Microsoft can deliver more affordable AI options to its cloud customers while reducing its own power consumption, it can lower expenses and boost profits. Furthermore, at 34 times earnings, Microsoft is attractively priced compared to a multiple of 47 for Nvidia. Don't get me wrong. I think both Microsoft and Nvidia are frontrunners in the AI revolution -- which is why I own both stocks.Read NextJan 27, 2026 •By James BrumleyForget Quantum Computing Stocks: This Unavoidable Platform Is Where Big Customers Are Actually GoingJan 25, 2026 •By John Ballard2 AI Stocks to Buy in January and Hold for 5 YearsJan 25, 2026 •By Keithen DruryShould You Buy Microsoft Stock Before Jan. 28?Jan 24, 2026 •By Daniel SparksMicrosoft Stock Is Down More Than 10% In 3 Months. Time to Buy the Dip?Jan 23, 2026 •By Rich SmithWhy Microsoft Stock Popped FridayJan 23, 2026 •By Keithen DruryPrediction: 4 Stocks That'll Be Worth More Than Apple 5 Years From NowAbout the AuthorDanny Vena, CPA, is a contributing Motley Fool technology analyst specializing in artificial intelligence, cloud computing, semiconductors, software, cybersecurity, and consumer electronics. He is a Certified Public Accountant and previously worked as a controller and accountant across small and midsize businesses. Danny also served 13 years in the U.S. Army. He holds a bachelor’s degree in accounting from the University of Phoenix.TMFLifeIsGoodX@dannyvenaStocks MentionedMicrosoftNASDAQ: MSFT$480.78 (+0.02%) $+10.50NvidiaNASDAQ: NVDA$189.22 (+0.01%) $+2.75AlphabetNASDAQ: GOOGL$335.21 (+0.01%) $+1.95AmazonNASDAQ: AMZN$244.70 (+0.03%) $+6.28AlphabetNASDAQ: GOOG$335.56 (+0.01%) $+1.97*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.