AMD is set to pose a serious challenge to Nvidia in the artificial intelligence (AI) chip market, with plans to increase production of its MI300 chips in the fourth quarter. This move is expected to threaten Nvidia’s dominance in the market. Lisa Su, CEO of AMD, announced the expansion of AI chip production, emphasizing that the new MI300 chip is designed to compete with Nvidia’s cutting-edge H100 chip, which is currently facing supply shortages.
AMD’s CEO stated that there is great interest in the MI300 series chips among customers, and the company has expanded its partnerships with top-tier cloud providers, large enterprises, and numerous AI companies during the third quarter. Investors are confident that AMD’s upcoming product launch later this year will offer a strong challenge to Nvidia in the rapidly growing advanced AI chip market, resulting in a positive outlook for AMD’s stock performance in the fourth quarter.
It is worth noting that AMD is exploring opportunities to sell AI chips in China. Unlike its major competitors, such as Nvidia and Intel, AMD does not manufacture custom chips for the Chinese market due to US export restrictions. However, CEO Su expressed optimism about the sales potential in the Chinese AI market and assured compliance with US export regulations. The company plans to develop products for Chinese customers seeking AI solutions.
AMD’s data center business, including the sales of MI300, is projected to generate higher revenue this year compared to the $6.04 billion in the previous year. However, in the second quarter, revenue from both the data center and client businesses decreased. The decline was attributed to a decrease of 11% in data center business revenue, amounting to $1.32 billion, and a 54% drop in client business revenue, totaling $998 million compared to $2.2 billion in the previous year.
Experts anticipate that major cloud companies, such as Microsoft and Google, will increase their investments in data centers in the second half of this year, especially in AI chips and infrastructure. With the potential launch of the MI300 chip in the fourth quarter, when Nvidia chips may not be widely available, there is expected to be high demand. Jenny Hardy, portfolio manager at technology advisory and investment firm GP Bullhound, stated that if AMD can ramp up production and launch the MI300 chip at the opportune time, they have the potential to meet this demand.
Overall, the competition between AMD and Nvidia in the AI chip market is heating up, with AMD’s plans to increase production and offer a strong challenge to Nvidia’s dominance. As the market expands, both companies are positioning themselves to capture a significant share of the growing demand for advanced AI chips and infrastructure.
Experts “If AMD increases production of MI300 chips, Nvidia will be threatened”
AMD is expected to seriously compete from the fourth quarter with Nvidia, which dominates this market with a new super chip for artificial intelligence (AI).
According to foreign media such as Reuters on the 1st (local time), AMD CEO Lisa Su announced on the same day that it plans to expand AI MI300 chip production from the fourth quarter of this year. CEO Su emphasized that the new MI300 AI chip is designed to compete with the cutting-edge H100 chip, which Nvidia produces but is in short supply.
“Customers are showing great interest in MI300 series chips,” he added, adding that AMD expanded its cooperation with top-tier cloud providers, large enterprises and many AI companies during the third quarter. According to Reuters, investors are confident that when AMD launches a related product later this year, it can provide a strong challenge to Nvidia in the growing advanced AI chip market.
Thanks to this situation, AMD stock is expected to show a strong performance in the fourth quarter. In fact, on this day, AMD’s share price rose about 3.5% in after-hours trading. AMD is known to be exploring new opportunities to sell AI chips in China. Unlike major competitors such as Nvidia and Intel, AMD does not make custom chips for the Chinese market. AMD’s flagship chips cannot be sold in China as they exceed performance limits linked to US export restrictions.
In this regard, CEO Su said, “We see the sales potential in the Chinese AI market.” “Our plan, of course, is to fully comply with US export regulations,” he said. “But we believe there are opportunities to develop products for Chinese customers looking for AI solutions and we will continue to move in that direction.”
Revenue from AMD’s data center business, including sales of the MI300, is forecast to be higher this year than last year’s $6.04 billion. However, revenue from AMD’s data center business in the second quarter recorded $1.32 billion, down 11% from last year, and revenue from the client business also fell 54% to $998 million compared to $2.2 billion last year.
Experts predict that major cloud companies such as Microsoft and Google will expand their investment in data centers in the second half of the year, especially with AI chips and infrastructure. “If AMD ramps up production and launches the MI300 chip in the fourth quarter at a time when Nvidia chips are not available to many, there will be high demand,” said Jenny Hardy, portfolio manager at GP Bullhound, a technology advisory and investment firm . . he can,” he said.
Reporter Seo Jae-chang of Helloty |
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