Challenging Nvidia, AMD is becoming an AI chip company

Challenging Nvidia, AMD is becoming an AI chip company

It doubled in a year. At the end of July, chip giant AMD (Advanced Microelectronics) released its second quarter 2024 financial report. Among them, the data center business grew rapidly, with net income of US$2.8 billion in the second quarter, a year-on-year increase of 115%, a record high, accounting for nearly 48% of total revenue. This is mainly due to a chip: AMD Instinct MI300. At the end of 2023, AMD released the Instinct MI300 series, a new generation of AI/HPC dedicated accelerators, including the MI300X with pure GPU design and the MI300A with CPU+GPU fusion design, which fully benchmarked Nvidia's H100 series. Since its launch, thanks to the surge in demand for AI computing power, MI300 sales have grown rapidly. In the second quarter of this year, revenue exceeded US$1 billion, making it AMD's fastest growing product ever. According to AMD Chairman and CEO Lisa Su, more than 100 companies and AI customers are currently actively deploying MI300X. Several OEM manufacturers will use MI300X systems for mass production, including Dell, HP Enterprise, Lenovo and AMD; several cloud service providers, including Microsoft and Oracle, are also increasing the adoption and deployment of MI300X chips. She predicts that AMD's artificial intelligence chip revenue will exceed US$4.5 billion in 2024, higher than the US$4 billion estimated in April. Before the financial report was released, AMD's stock price continued to decline, approaching its lowest level in seven months. With the release of the financial report, AMD's stock price rose by more than 7% after the market. It even led to a rebound in chip stocks.

AMD's data center business is still far behind Nvidia's. The former's quarterly revenue was $2.8 billion, while the latter's was $22.6 billion. But investors seem to believe that AMD is gradually becoming stronger and has the ability to grab more market share from Nvidia. In the AI era, the "shovel selling" business is not only for Nvidia, but also for AMD.