A magnetically levitated high-speed spindle assembly ( 20 ) is provided for forming non-circular holes ( 22 ) in workpieces ( 24 ) or non-circular surfaces on pins. The non-circular holes ( 22 ) can be formed with dimensionally varying axial trajectories at high speeds and with great accuracy. This is accomplished by supporting a rotating spindle ( 26 ) between first ( 58 ) and second ( 60 ) magnetic bearing clusters and independently controlling these bearing clusters ( 58, 60 ) to move a shaping tool ( 32 ) at the end of the spindle ( 26 ) in a predetermined orbital path (B). A multiple input-multiple output control strategy is used to control spindle ( 26 ) movements in the X and Y axes. The tilt angle between the cutting edge ( 34 ) of the shaping tool ( 32 ) and the orbital path (B) is maintained perpendicular under this multiple input-multiple output control of the magnetic bearing clusters ( 58, 60 ) to further improve shaping precision and spindle ( 26 ) stability during high-speed operations.