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Microsoft Announces Deployment of Custom 3nm Azure Cobalt 200 Arm CPU in Data Centers
Monday, December 8, 2025 at 01:10 AM
Microsoft has confirmed the deployment of its new custom Arm-based Azure Cobalt 200 processor, manufactured on TSMC's 3nm process, into its own data centers as part of an in-house silicon strategy to power Azure services and potentially replace x86 CPUs from companies like AMD and Intel.
Context
Microsoft is deploying its custom 3nm Azure Cobalt 200 Arm CPU in data centers, challenging Intel and AMD's x86 dominance. This 132-core processor, manufactured by TSMC, is in production, targeting over 50% higher performance than its predecessor, with broader customer availability by 2026. This signals Microsoft's intent to reduce x86 reliance, prioritizing power efficiency and optimized performance for cloud-native and AI workloads. This mirrors Amazon's successful Graviton processors, offering approximately 40% better price-performance than x86, with Graviton4 boosting compute performance by up to 30%. The increasing shift to custom Arm CPUs by hyperscalers like Microsoft and Amazon is driven by critical needs for optimized performance, lower power consumption, and reduced total cost of ownership. This suggests a growing inevitability of a more diversified and competitive server CPU market, with Arm gaining significant traction.
Sources (15)
Microsoft unveil in-house cloud chip Azure 'Cobalt 200'Microsoft announces Azure Cobalt 200, its next-generation Arm ...Azure Cobalt processor-based Virtual MachinesAWS Market Share 2025: Insights into the Buyer LandscapeAWS Graviton surpasses x86 in market share - LinkedInMicrosoft has Designed its Own 132 Core Processor: Azure Cobalt ...Microsoft unveils Azure Cobalt 200 CPU, in-house chip ...Cobalt 200: Microsoft's next-gen Arm CPU targets lower ...
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