Software & hardware are completely different disciplines. The vast majority of software developers don't have a clue about the intricacies of CPU architectures unless they're involved with embedded designs & driver coding etc. and they don't need to know. Hell some of them don't even know what assembler is.
I'm sure MS will hire the right talent to do the job... for all we know they might be hiring people like jim keller etc...
Microsoft has always been a software company with a few basic bits of hardware (keyboards, mice, etc) that it designs and sells, the company is not geared up for anything near as complicated as CPU design and any talent they hire will be hitting walls to change the Microsoft mindset.
If you look at PCB design, that is quite a complex field with lots of things to be aware of from schematic to laying out all the components and making sure your tracks, layers and impedances are correct, but at least you can design an improved PCB if testing shows that your PCB design is not working as intended, or an easy/uggly rework fix for low volumes.
CPU design is a completely different level of complexity compared to say PCB design, if you get your CPU design wrong you might be able to work around it with a microcode update but there are no rework options for a defective CPU design.
Designing server CPUs will in any case take a few years and many prototypes before Microsoft has CPUs worthy of being mass produced to replace Intel CPUs, and Microsoft must be fully aware that they're not going to have new CPUs any time soon.
I'm guessing that Microsoft's bigger problem (based on all the breaking software updates etc) is a lack of QA, or QA being bypassed, and that QA problem is likely to persist with CPU design.
Azure cloud comes crashing down as fog.