Microsoft designs Cobalt in-house, tailoring it specifically for Azure\u2019s data center infrastructure<\/a>. Cobalt 100 currently powers Microsoft services like Teams and Defender for Endpoint security, while Azure customers can access it as virtual machines for their own workloads.\u00a0<\/p>\n \u201cA 50% performance increase from one generation to the next is huge, and the fact that they\u2019re using it for their own applications and that their clients can port to it is a huge benefit for Microsoft,\u201d said Jim McGregor, principal analyst at Tirias Research, in an interview with Data Center Knowledge.\u00a0<\/p>\n Related:Global Cloud Market Nears $100B, Neoclouds Surge 200%<\/a><\/p>\n \u201cThis isn\u2019t just a minor tweak or change in process technology,\u201d McGregor added. \u201cThey\u2019re investing heavily in it and putting a lot into this to make it an optimal architecture.\u201d\u00a0<\/p>\n While major cloud providers \u2013 Azure, AWS, and Google Cloud \u2013 partner with chipmakers like Nvidia, AMD, and Intel, they also find it advantageous and cost-effective to develop custom chips<\/a> that optimize their data center operations and cloud services.\u00a0<\/p>\n Analysts expect strong adoption of the second-generation Cobalt chip among Microsoft’s customers. Although Cobalt 100 was decent, it was a first-generation chip, according to analyst Matt Kimball of Moor Insights & Strategy. Cobalt 200 delivers substantial improvements in both power and performance. The chip’s foundation on the Arm Neoverse architecture, its 3nm process node, and Microsoft’s engineering expertise drive these advancements.<\/p>\n \u201cWhile the first-generation Cobalt chip had good success, I imagine Microsoft will see considerable pickup with Cobalt 200,\u201d Kimball told Data Center Knowledge. \u201cThe average Azure customer is an enterprise customer that likes to let newer technology prove out before deploying.\u201d\u00a0<\/p>\n Scott Guthrie, Microsoft Executive Vice President of Cloud and AI, discusses the Cobalt 200 chip at Microsoft Ignite.<\/p>\n Azure AI Platform Enhancements\u00a0<\/p>\n Microsoft also introduced advancements to Microsoft Foundry (formerly Azure AI Foundry), a platform-as-a-service offering for enterprises that develop, deploy, and manage generative AI and agentic AI applications.\u00a0<\/p>\n![\"Scott](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/04\/Scott_Guthrie_EVP_of_Cloud_and_AI.jpg\" "\\"Scott")
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