Tag: AMD

AMD’s Future Hinges on AI Chip Success

Posted on by slightbourne@noblecapitalmarkets.com

Chipmaker Advanced Micro Devices (AMD) offered an optimistic forecast this week for its new data center AI accelerator chip, predicting $2 billion in sales for the product in 2024. This ambitious target represents a crucial test for AMD as it seeks to challenge rival Nvidia’s dominance in the artificial intelligence (AI) chip market.

AMD’s forthcoming MI300X processor combines the functionality of a CPU and GPU onto a single chip optimized for AI workloads. The chipmaker claims the MI300X will deliver leadership performance and energy efficiency. AMD has inked deals with major hyperscale cloud customers to use the new AI chip, including Amazon Web Services, Google Cloud, Microsoft Azure and Oracle Cloud.

The $2 billion revenue projection for 2024 would represent massive growth considering AMD expects a modest $400 million from the MI300X this quarter. However, industry analysts caution that winning significant market share from Nvidia will prove challenging despite AMD’s technological advancements. Nvidia currently controls over 80% of the data center AI accelerator market, fueled by its popular A100 and H100 chips.

“The AI chip market is still in its early phases, but it’s clear Nvidia has built formidable customer loyalty over the past decade,” said Patrick Moorhead, President of Moor Insights & Strategy. “AMD will need to aggressively discount and wow customers with performance to take share.”

AMD’s fortunes sank earlier this year as the PC market slumped and excess inventory weighed on sales. Revenue from the company’s PC chips dropped 42% in the third quarter. However, AMD sees data center and AI products driving its future growth. The company aims to increase data center revenue by over 60% next year, assuming the MI300X gains traction.

But AMD faces headwinds in China due to new U.S. export rules limiting the sale of advanced AI chips there. “AMD’s ambitious sales target could prove difficult to achieve given the geopolitical climate,” said Maribel Lopez, Principal Analyst at Lopez Research. China is investing heavily in AI and domestic chipmakers like Baidu will be courting the same hyperscale customers.

Meanwhile, Intel aims to re-enter the data center GPU market next year with its new Ponte Vecchio chip. Though still behind Nvidia and AMD, Intel boasts financial resources and manufacturing scale that shouldn’t be underestimated. The AI chip market could get very crowded very quickly.

AMD CEO Lisa Su expressed confidence in meeting customer demand and hitting sales goals for the MI300X. She expects AMD’s total data center revenue mix to shift from approximately 20% today to over 40% by 2024. “The AI market presents a tremendous opportunity for AMD to grow and diversify,” commented Su.

With PC sales stabilizing, AMD raising its AI chip forecast provided a sigh of relief for investors. The company’s stock rebounded from earlier losses after management quantified the 2024 sales target. All eyes will now turn to AMD’s execution ramping production and adoption of the MI300X over the coming year. AMD finally has a shot at becoming a major player in the AI chip wars—as long as the MI300X lives up to the hype.

AMD Will Acquire AI Software Specialist Nod.ai Amid Mixed Tech IPO Environment

Posted on by slightbourne@noblecapitalmarkets.com

AMD announced Monday that it will acquire Nod.ai, an expert in optimized artificial intelligence (AI) software solutions. The deal aims to boost AMD’s capabilities in open-source AI development tools, compilers, and models tuned for AMD data center, PC, gaming and graphics chips.

The acquisition comes during a rocky period for initial public offerings in the technology sector. Chip designer Arm Holdings, which recently went public, has seen its shares drop below its IPO price as investors grow concerned over tech valuations and growth prospects in a turbulent market.

Nod.ai: Boosting AMD’s AI Software Expertise

San Jose-based Nod.ai has developed industry-leading software that speeds the deployment of AI workloads optimized for AMD hardware, including Epyc server CPUs, Radeon gaming graphics, and Instinct data center GPUs.

Nod.ai maintains and contributes to vital open-source AI repositories used by developers and engineers globally. It also works closely with hyperscale cloud providers, enterprises and startups to deploy robust AI solutions.

AMD gains both strategic technology and rare AI software expertise through Nod.ai’s highly experienced engineering team. Nod.ai’s compiler and automation capabilities reduce the complexity of optimizing and deploying high-performance AI models across AMD’s product stack.

Market Tailwinds for AI Innovation

The pickup in AI workload optimization comes at a time when machine learning and deep learning are being rapidly adopted across industries. AI-optimized hardware and software will be critical to support resource-intensive models and deliver speed, accuracy and scalability.

AMD is looking to capitalize on this demand through its unified data center GPU architecture for AI acceleration. Meanwhile, rival Nvidia dominates the data center GPU space crucial for AI computing power.

Arm IPO Capitulates Amid Market Jitters

UK-based Arm Holdings, which supplies intellectual property for chips used in devices like smartphones, recently conducted a $40 billion IPO, one of the largest listings of 2023. However, Arm’s share price plunged below its IPO level soon after debuting in September.

The weak stock performance highlights investor skittishness around loss-making tech firms amid economic headwinds. ARM’s licensing model also faces risks as major customers like Apple and Qualcomm develop their own proprietary chip technologies and architectures.

Unlike Arm, AMD is on solid financial footing, with its data center and gaming chips seeing strong uptake. However, AMD must still convince Wall Street that its growth trajectory warrants robust valuations, especially as Intel mounts a comeback.

Betting on Open Software Innovation

AMD’s Nod.ai purchase aligns with its strategic focus on open software ecosystems that promote accessibility and standardization for AI developers. Open software and hardware foster collaborative innovation within the AI community.

With Nod.ai’s talents added to the mix, AMD is betting it can democratize and optimize AI workload deployment across the full range of AMD-powered devices – from data center CPUs and GPUs to client PCs, gaming consoles and mobile chipsets.

If successful, AMD could carve out an advantage as the preferred AI acceleration platform based on open software standards. This contrasts with Nvidia’s proprietary approaches and closed ecosystems tailored exclusively for its GPUs.

As AI permeates across industries and applications, AMD is making the right long-term bet on open software innovation to unlock the next phase of computing.