Microsoft is rumored to launch an artificial intelligence chip next month.

According to the latest report from Zhitong Finance and Economics App, Microsoft (MSFT.US) plans to launch an artificial intelligence (AI) chip at its annual developer conference next month to reduce costs. The company has been researching chips for many years to help reduce its reliance on Nvidia (NVDA.US), which provides the majority of GPUs needed for AI work and training large language models.

In August of this year, UBS stated that Microsoft's limitation on the number of GPUs it can access is a "reality" that could impact its ability to generate AI revenue streams next year. By manufacturing its own GPUs, Microsoft could mitigate this risk.

However, Microsoft has publicly stated that it will continue to purchase GPUs from Nvidia.

The report states that Microsoft's chips will be used in data center servers and to support AI capabilities in its productivity applications.

It is also reported that OpenAI, which received billions of dollars in investment from Microsoft earlier this year, is also discussing the development of its own AI chips and even evaluating potential acquisition targets.

It is worth noting that both Amazon (AMZN.US) and Google (GOOGL.US) have their own AI chips, namely Inferentia and TPU, respectively.