On May 4, Bloomberg News reported that Microsoft Corp is joining forces with Advanced Micro Devices Inc (AMD) to support the chipmaker’s expansion into artificial intelligence (AI) processors. The collaboration aims to provide an alternative to Nvidia Corp, which currently dominates the market for AI-capable graphics processing units (GPUs).

Microsoft is offering financial support to bolster AMD’s efforts, and the two companies are working together on a homegrown Microsoft processor for AI workloads, code-named Athena. According to sources familiar with the matter, several hundred employees from Microsoft’s silicon division are now working on the Athena project.

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AMD’s shares climbed 9% following the news, while Microsoft’s shares experienced a 1% increase. The partnership between Microsoft and AMD highlights the growing demand for AI-capable chips, as AI continues to revolutionize industries and reshape the global economy.

AMD has not commented on the matter, and Microsoft did not immediately respond to Reuters‘ request for comment. However, the collaboration is expected to help both companies expand their reach in the thriving AI chip market.

By partnering with AMD, Microsoft gains access to cutting-edge chip technology to power its AI workloads, while AMD benefits from Microsoft’s financial support and vast market presence. As a result, the partnership has the potential to disrupt Nvidia’s dominance in the AI-capable GPU market, driving innovation and competition in the rapidly growing AI industry.

As AI technology continues to advance, collaborations like the one between Microsoft and AMD are crucial for the development of more efficient, powerful, and accessible AI chips. These partnerships ensure that the AI landscape remains competitive and diverse, ultimately fostering the growth of the technology and its applications across various sectors.