– AMD Surges as Company Unveils AI Chip to Challenge Nvidia

AMD’s CEO Lisa Su discussed the Instinct MI300X, a significant graphics processor initially revealed for AI-centric servers, during a presentation on Wednesday. Both Microsoft and Meta had already confirmed their intentions to utilize this chip.

Following a surge in AMD shares on Thursday, investors are speculating that AMD could potentially surpass Nvidia in the AI chip sector.

On Thursday, AMD’s stock experienced a notable 9.9% increase, closing at $128.37, marking the highest point since June and the most significant single-day gain since May. This surge closely followed the introduction of new artificial intelligence chips by AMD, positioning them in direct competition against Nvidia for AI application dominance.

Lisa Su reiterated the features of the Instinct MI300X, emphasizing its suitability for AI-centric servers and the commitments from major players like Microsoft and Meta during the presentation on Wednesday.

Despite Nvidia’s stronghold in the AI chip industry over the past year, cloud providers and tech companies are actively seeking alternatives to reduce expenses and enhance operational flexibility.

While AMD’s projected \(2 billion in AI GPU sales for 2024 falls short of market expectations for Nvidia’s AI revenue, the market responded positively to AMD’s stock surge on Thursday, indicating confidence in their potential to capture a share of the AI chip market from Nvidia. Analysts anticipate Nvidia’s data center revenue to exceed \)16 billion in the third quarter alone, encompassing various cards beyond AI GPUs.

AMD’s forthcoming high-end device is expected to enter the market in significant quantities in the near future.

Deutsche Bank analyst Ross Seymore expressed optimism about AMD’s growth prospects, citing their strong customer relationships and competitive product performance. He highlighted the company’s strategic position to capitalize on the expanding AI Total Addressable Market (TAM).

Citi analysts forecasted that AMD could potentially secure a 10% market share in the overall AI chip market.

Lisa Su projected a significant growth trajectory for the AI chip industry, estimating a market value of $400 billion within the next four years, surpassing previous predictions. She emphasized that AMD’s strategic positioning would enable them to thrive in the market without necessarily surpassing Nvidia’s current dominance.

Su emphasized AMD’s potential to capture a substantial portion of the expanding AI chip market, stating, “I think it’s obvious that Nvidia has to be the great bulk of that right now. In 2027, we think it might be $400 billion or more. We may also purchase a good part of that,” during the event on Wednesday.