Microsoft Begins To Develop Its Own Processor

According to Bloomberg, Microsoft is working on internal processor designs for use with servers running the company's cloud services, contributing to an industry-wide effort to reduce reliance on Intel's chip technology.

Specifically, the world's largest software maker is using ARM designs to produce a processor, which will be used in its data centers, says some people familiar with the plan.

It was also reported that the company is also exploring the use of a different chip that could power some Surface personal computers.

After the news was revealed, Intel's shares fell 6.3% to close at $47.46, seeing a 21% decline this year.

The move is a key Microsoft committed to providing itself with the most important hardware they use. Cloud rivals like Amazon are making similar efforts.

It was all based on the argument that the self-developed chip would be better suited to certain needs, offering cost and performance advantages over the pre-sold silicon mostly provided by Intel for a while.

Microsoft's efforts are also more likely to lead to the creation of a server chip rather than a chip for Surface devices, though this is unlikely to happen.