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Intel falls on report Microsoft plans to develop its personal chips for PCs and servers

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Satya Nadella, CEO of Microsoft Corp., speaks during the company's annual general meeting on November 29, 2017 in Bellevue, Washington.

David Ryder | Bloomberg | Getty Images

Intel fell up to 6% on Friday afternoon after Bloomberg reported that Microsoft plans to develop its own chips for its Surface PCs and servers.

Intel is known to have a longstanding partnership with Microsoft as the primary processor manufacturer for Windows PCs.

The report comes a month after Apple started selling PCs with its own M1 processor instead of Intel chips.

The chips are reportedly based on Arm's technology, which Nvidia is currently acquiring from Softbank. Apple's chips for its iPhones and Amazon server chips are also based on Arm's instruction set.

"Apple's move must have been very interesting. We're investigating it," said Judson Althoff, executive vice president of global retail at Microsoft, during an appearance at the UBS global, technology, media and telecommunications conference on December 8th.

Microsoft announced in 2017 that it was working with Arm server manufacturers to optimize silicon for use in its own data centers. Windows currently runs on Arm-based PCs, usually with chips from Qualcomm.

Intel and Microsoft representatives did not immediately return requests for comments.

This story is in development; Check again for updates.

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Steven Gregory