Meta to roll out custom AI chips in September to expand computing capacity

Following a massive development in the tech infrastructure race, Meta is planning to start manufacturing an artificial intelligence (AI) chip production from September as part of its plan to boost overall computing power to 14 gigawatts next year.

According to an internal memo reviewed by Reuters, Meta plans to start production on its next-generation in-house AI chip, code-named "Iris."

"Iris", is part of a four-generation project for Meta Training and Inference Accelerators (MTIA. The plan is to use custom-built silicon to improve the AI that powers its Facebook and Instagram social media platforms.

By introducing their own custom chips into their data centers, Meta can significantly lower the astronomical energy and financial costs associated with third-party hardware.

The move is a direct bid by the company to aggressively scale up its infrastructure and lessen its extreme dependency on hardware from chip giants like Nvidia and Advanced Micro Devices (AMD).

Meta is working with Broadcom to help design its new AI chips while it chosed Taiwan Semiconductor Manufacturing Company for production.

The bug-testing completion and production timing have not been previously reported.

As per the memo, initial chip Testing took only six weeks and found no major issues.

Meta unveiled Iris under its technical name in March along with three other AI processors. It plans to launch a chip about every six months through 2027, whereas typically firms release AI chips at intervals of a year or more.

According to tech experts the relatively quick progress signals positive momentum for an in-house effort that has floundered since its launch more than half a decade ago.

The firm expects to spend as much as $145 billion on AI infrastructure this year, a significant portion of Big Tech's more than $700 billion projected outlay on the technology.

This comes as components such as memory and AI chips have experienced a surge in demand as tech companies race to expand data centers to keep pace with AI's thirst for computing power.

Memory and other chip prices have risen rapidly and substantially enough that "chipflation" has become a macroeconomic concern, Morgan Stanley analysts said.

To expand computing infrastructure, Meta has secured long-term, multi-year supply agreements with companies including Samsung Electronics for memory chips, Sandisk for flash storage and Sumitomo Electric for fiber-optic equipment.