Firstly, who is even working on 128-bit processors? Secondly, what is the source for this news? At best the hint of a rumor. Thirdly, what industry need does 128-bit processors satisfy?
All around it points to a lack of critical thinking and skepticism, if not straight up naivete, gullibility, and ignorance bordering on incompetence on the part of the "reporters".
This line strikes me as amusing: "Consequently, the company [MS] is also forming relationships with major partners, including Intel, AMD, HP, and IBM." Newsflash: MS already has close relationships with each of those companies. There are many "business partners" from each of those companies who effectively work on the Microsoft campus.
At best this "revelation" is about the Itanium processor (which uses 128-bit instructions, though it retains a 64-bit word length and address space), in which case it is not only boring but horribly misleadingly recharacterized.