AMD CEO Lisa Su predicts that the company will earn $2 billion in 2023 from its new AI chip. The Radeon Instinct MI300 will start shipping to customers in the coming weeks. With this GPU, AMD will hope to intensify its competition with Nvidia, which currently dominates the AI market. AMD stock value shows that AI optimism is catching on, despite disappointing sales figures from the gaming segment and elsewhere.
AMD says it has received many orders for the MI300. Persistent shortages at Nvidia will play a role in this, especially since those chips can only be purchased at exorbitant prices.
The MI300 is expected to bring in a billion dollars the fastest relative to other AMD products. “We think the market is huge,” said Lisa Su. In total, such chips would fuel a market worth $150 billion. “We’re just at the very early innings of people adopting this,” the AMD CEO stated to investors and analysts. In terms of both software and hardware, she praised the progress that has been made. Consequently, both issues will require continuous attention to be competitive with Nvidia: in terms of market share, performance and familiarity with the included software, it is far behind the dominant competitor.
Strengthening and weakening
The AI hype comes at a good time for AMD, just as it did for Nvidia. The Covid-19 pandemic caused a huge uptick in sales of laptops, desktops and individual components. However, these markets have been declining significantly since early this year, as have industrial, automative and networking. For AMD, this is problematic on two fronts, as it produces both GPUs and CPUs.
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However, the company’s powerful AI chip may suffer from export restrictions. At Nvidia, U.S.-imposed sanctions against China caused the company’s market value to briefly drop below $1 trillion again.
Longer term
At least the AI future looks bright, if AMD is to be believed. For now, that story is focused on data centers and cloud players, which are starting to offer mode widespread AI functionality and customizability. Competitor Intel is already seizing the opportunity at the end of the year by outfitting laptops with AI accelerators baked into its new Meteor Lake architecture. Apple is also talking about better performance in terms of artificial intelligence with its recently presented M3 chips. In the longer term, we can expect AMD and, again, Nvidia to further democratize AI hardware. Perhaps this will take the form of a finally mature form of Windows on ARM, which both AMD and Nvidia are busy developing hardware for.
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