The New York Times is reporting that Microsoft is looking to start designing its own CPUs:

"Microsoft is turning to a new source of chip design: its own labs.

The design effort will initially be split between research labs at the company’s headquarters in Redmond, Wash., and its Silicon Valley campus here. Tentatively named the Computer Architecture Group, the project underscores sweeping changes in the industry.

One reason for the effort is that Microsoft needs to begin thinking about the next-generation design of its Xbox game console, said Charles P. Thacker, a veteran engineer and Microsoft engineer who will head the Silicon Valley group. Voice recognition may also be an area where the research could play a significant role."

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