So far, Microsoft has show AI living in the cloud. AMD, Intel, and Qualcomm want AI to live on the PC, powered by their own processors. Does that pose a potential conflict?

Apparently not. At AMD’s “Advancing AI” presentation, where the company launched the Ryzen 8040 family of AI-enhanced mobile processors, Microsoft’s chief Windows executive said that cloud AI and local AI could coexist.

It’s not a trivial matter. Microsoft not only supplies licenses for millions of Windows machines, but also sells Microsoft 365 subscriptions to even more — 76 million consumer subscribers, as of the current third calendar quarter of 2023, with commercial growth of 14 percent on top of that. Microsoft also wants to charge users $30 per month for Microsoft 365 Copilot, the AI tool it will use to enhance productivity. That, like most of Microsoft’s services, will use the Microsoft Azure cloud, which makes up the bulk of Microsoft’s revenue.

AMD, along with its rivals, wants consumers and commercial customers to run AI on the local PC. AMD highlighted applications like Adobe Photoshop and Lightroom, along with BlackMagic’s DaVinci Resolve, that use on-chip AI instead. Microsoft’s own Windows Studio Effects tap local AI capabilities to blur backgrounds and filter audio, too. Placing AI functions in the cloud could undercut chipmakers and the value they add.

Fortunately, Pavan Davuluri, the new corporate vice president within Microsoft’s Windows and Devices division, alluded to a hybrid strategy of using both local AI as well as the cloud to process AI functions.

Davuluri referred to what he calls a “hybrid engine,” where the cloud and local computing work together.

“It’s really about seamless computing across the cloud and client, bringing together the benefits of local compute — things like enhanced privacy and responsiveness and [low] latency with the power of the cloud: microphones, models, large datasets, cross-platform inferencing and so on,” Davuluri said. “And so for us, we feel like we’re working together to build that future destination of best AI experiences on PCs.”

AMD chief executive Dr. Lisa Su joked with Davuluri that Microsoft was always demanding more TOPS (trillions of operations per second). “We will use every TOP you provide,” Davuluri responded.

“Together with Windows we feel like we’re building that future for the Copilot where we will orchestrate multiple apps, services and across devices — quite frankly, functioning as an agent in your life that has context and maintains context across entire workflows,” Su concluded. “So we’re really excited about these devices coming to life, the Windows ecosystem.”