SAN FRANCISCO, California: Microsoft plans to deploy potentially more than one million of its new Maia 300 artificial intelligence chips next year as it expands its own computing infrastructure to support internal AI services.

The company announced the third generation of its custom AI chip on October 12, saying it plans "multi-gigawatt deployments" beginning next year.

The Maia 300 is designed to handle AI data processing for tasks including coding and carrying out complex business functions on behalf of users. Its predecessor already runs Microsoft's in-house AI models and OpenAI models offered through Microsoft's Azure cloud computing service.

The new processor arrives as cloud computing companies and AI firms, including OpenAI, develop custom chips to loosen Nvidia's hold on the AI computing market.

Microsoft took a different technical approach from Nvidia, whose AI accelerators use one large computing chip surrounded by high-bandwidth memory chips.

The central computing processor in Microsoft's Maia 300 consists of "chiplets," or typically specialized chips bonded together. It uses Taiwan Semiconductor Manufacturing Co's 2-nanometer technology for key computing functions.

Other chiplets in the design use cheaper 3-nanometer technology for functions such as moving data off the processor and elsewhere in the system.

Maia 300 processors will be installed in racks with 96 chips, consuming about 167 kilowatts of power. Nvidia's most recent GB300 AI server racks contain 72 graphics processing units and use 142 kilowatts.

Microsoft said Maia 300 would deliver about 40 percent more useful computing per megawatt than "leading GPU-based systems," although it did not identify the systems used for the comparison.

"It's basically delivering more intelligence for every watt, every dollar, and every byte of memory by optimizing across the entire system," Rani Borkar, president of Azure hardware systems and infrastructure at Microsoft, told Reuters.

Microsoft said it plans to begin its "multi-gigawatt deployments" of Maia 300 next year. The company has said it expects to spend more than US$175 billion on capital expenditures this calendar year.