Keeping up with Nvidia’s explosive growth might be an impossible task, but AMD is still making inroads by focusing on building data centres that power AI systems, like ChatGPT.
What happened: Semiconductor-maker Advanced Micro Devices (AMD) plans to pay nearly US$5 billion for ZT Systems, a company that designs and manufactures equipment used for advanced data centres, in a move that will help it compete with rival chipmakers.
- But AMD isn’t getting into the manufacturing business. The company is planning to sell off that arm and keep 1,000 design engineers to focus on more profitable areas.
Why it matters: Data centres are the backbone of AI technologies. So to bring value to the Fortune 500 companies looking to build up their capabilities across AI, big data, and cloud computing, like Microsoft and Meta, companies like AMD could help set up these huge centres.
Bottom line: AMD is fighting for a slice of the AI chip market that could reach $400 billion in annual sales in the next five years, according to the company. AMD generated about $23 billion in revenue over the past four quarters, compared to $80 billion by Nvidia.—SB