Last week, Advanced Micro Devices (AMD, Financial) announced its new AI chip, the Instinct MI325X, and has seemingly queued up a direct challenge to Nvidia's(NVDA, Financial) dominant GPUs for data centers. This new AI processor presented at Computex 2024 in Taipei should threaten Nvidia's Blackwell chips, which could positively influence competition and change prices for AI chips.
Expected to go into production before the end of 2024, the MI325X is one of several products that AMD is releasing in an effort to take advantage of what is being predicted to become the $500 billion artificial intelligence chip market by 2028. Since OpenAI's ChatGPT requires massive amounts of GPU usage, AMD aims to target Nvidia, which controls over 90% of the data center AI chip market.
While AMD has always been a second fiddle in this segment, the company's chief executive, Lisa Su, recently underscored the increasing call for AI and the company's resolve to improve its spend on AI chip designing. This is part of the new product release plan that AMD has been fixing to bring out new chips every year the next ones are the MI350 in 2025 and the MI400 in 2026.
AMD also wants to capture AI developers for whom Nvidia's CUDA programming language is most popular by improving its own ROCm software to make it easier to transition to AMD's accelerators. This could expand the options for developers who might work using elements connected with the content creation and predictive modeling.
While AMD's stock fell by 4 % after the announcement. The market response raises the bar and redoubles the competition in the AI-fueled space.
