Bloomberg reports that Microsoft is partnering with microprocessor maker AMD to bring its Athena AI chipset to market. The report cites multiple sources.

According to the publication, Microsoft is providing financial support to help fund AMD’s expansion into AI chipsets and AMD is working with Microsoft to create an in-house AI chipset for the software giant’s data centers. This in-house chipset, codenamed Athena, was first revealed by The Information last month.

Athena is designed as a cost-effective replacement for AI chipsets from Nvidia, which currently dominates this market. And it comes with newfound urgency as Microsoft’s ChatGPT-powered Bing chatbot workloads are incredibly expensive using third-party chips. With Microsoft planning to expand its use of AI dramatically this year, it needs a cheaper alternative.

Microsoft’s secretive hardware efforts also come amid a period of Big Tech layoffs. But the firm’s new Microsoft Silicon business, led by former Intel executive Rani Borkar, is growing and now has almost 1,000 employees, several hundred of which are working on Athena. The software giant has invested about $2 billion on this effort so far, Bloomberg says. (And that’s above the $11 billion it’s invested in ChatGPT maker OpenAI.)

Bloomberg also says that Microsoft intends to keep partnering with Nvidia too, and that it will continue buying Nvidia chipsets as needed.

AMD president and CEO Lisa Su alluded to this work in a conference call tied to the company’s latest financial report earlier this week.

“We are very excited about our opportunity in AI,” she said. “This is our number one strategic priority. We are in the very early stages of the AI computing era, and the rate of adoption and growth is faster than any other technology in recent history.”