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Investing.com -- Microsoft (NASDAQ:MSFT) stock fell 0.5% in pre-market trading on Friday following a report from The Information that the company’s next-generation AI chip is facing a delay of at least six months.
According to the report, Microsoft’s upcoming AI chip, code-named Braga, has encountered development issues that will push its mass production timeline from 2025 to 2026. The delay raises concerns that the chip may be less competitive compared to Nvidia’s (NASDAQ:NVDA) products by the time it reaches the market.
The report cited three people involved in the project who indicated that when Braga finally enters mass production next year, it is expected to underperform Nvidia’s flagship Blackwell chip. Microsoft had originally planned to deploy the Braga chip in its data centers this year, according to a senior Microsoft executive who worked on the chip team.
The development setbacks have reportedly stemmed from unanticipated design changes, staffing constraints, and high employee turnover. This delay is particularly significant in the fast-moving AI chip market, where development cycles typically take at least two years from conception to production, during which time the technological landscape can change dramatically.