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Big Tech companies are facing a catch-22 situation as they are unable to opt out of the cloud for fear of being left behind, but the cost of digital transformation is rising. To cut costs, companies like IBM, Google, Microsoft and Amazon are designing their own AI chips. Microsoft is accelerating its project to design its own AI chips, while Google’s AI chip engineering team has moved to its Google Cloud unit. As operating cloud data centres is expensive, some companies are shifting to on-premises solutions.