Intel’s relatively new division, Intel Foundry, has secured a major order from a significant partner — Microsoft. Microsoft CEO Satya Nadella announced that their chip will be built using Intel’s latest 18A (1.8 nm) process technology, with development costs estimated at over $15 billion. Given Intel’s roadmap for the 18A process, we can assume that Microsoft’s new chip will not be released before 2025.

Although neither company has disclosed specific details about the chip, Microsoft already introduced its own server processors — the Azure Maia AI Accelerator and Azure Cobalt 100 CPU — last November, with plans to deploy them this year. The Cobalt 100 is based on the Arm architecture, and Intel optimized its 18A process for Arm-based designs back in April of last year, indicating a possible collaboration on the next generation of the Cobalt processor.

In addition to improved efficiency due to the smaller node size, Intel’s 18A process offers the industry’s first-of-its-kind power delivery solution, which simplifies voltage regulation and reduces resistance, contributing to higher speeds and lower power consumption.

During the Q4 earnings call, Intel CEO Pat Gelsinger confirmed that “18A is expected to reach manufacturing readiness in the second half of ’24.” Since Intel’s own 18A-based processors are not expected to launch until 2025, this is likely also the expected release timeframe for Microsoft’s chip.