AMD (NASDAQ:AMD) stock is up 1% today after unveiling the MI300X, a new artificial intelligence (AI) superchip. AMD’s latest announcement has breathed new life into the GPU race, challenging industry leader Nvidia (NASDAQ:NVDA).
On Tuesday, AMD showcased a number of new chips set to hit the market later this year. The company showed off a new suite of Ryzen PRO 7040 series mobile processors, the Ryzen PRO 7000 series, a desktop processor, as well as the star of the show, the MI300X, which may represent the most powerful AI “accelerator” to hit the market this year.
The MI300X represents a new path for AMD, one earmarked by the quickly growing generative AI industry. The MI300X was designed for large language models, like the kind used by companies like OpenAI to build and train programs like ChatGPT.
AMD and AI
According to AMD Chief Executive Lisa Su, the company has refocused its attention on AI and its increasing market relevance.
“We think about the data center AI accelerator [market] growing from something like $30 billion this year, at over 50% compound annual growth rate, to over $150 billion in 2027,” Su told investors.
The MI300X is a clear rival to Nvidia’s data center AI chip, the H100, which can cost more than $30,000. It’s unclear how much AMD’s flagship AI chip will run, but given the state of the more gaming-centric semiconductors market, is clearly AMD’s best opportunity at making in way into Nvidia’s dominance in the space. Nvidia owns over 80% of the AI chip market space.
The MI300X boasts support for up to 192 GB of memory, even more than the H100’s 120 GB capacity.
“Model sizes are getting much larger, and you actually need multiple GPUs to run the latest large language models,” Su said.
What Does AMD’s Dive Into AI Chips Mean for AMD Stock?
While AMD’s latest unveil seemingly fell on deaf ears yesterday as AMD shares dropped 3.6% on the company’s chip announcement, it seems investors are starting to warm up to the idea. Although, the company has been on an upwards trajectory regardless this year. AMD stock is up almost 30% in the past month, part of the company’s nearly 100% gains year-to-date.
This year’s AI wave has pushed chipmakers like AMD and Nvidia back into the limelight, as the potential of AI chips in data centers has far outshined prior years’ gaming chip frenzy.
Indeed, while the sale of gaming chips has notably slowed in the past year, chipmakers have only thrived in the face of generative AI.
Apparently, even the likes of Amazon (NASDAQ:AMZN) have taken notice of AMD’s latest moves. According to a recent Reuters report, Amazon’s cloud sector is currently weighing the possibility of using AMD’s new AI chips.
According to Su, the MI300X will ship later this year and will be widely available. In the face of sweeping chip shortages in past years, Su reassured investors AMD is capable of producing as many chips as needed in 2024.
Analysts seem tenuously convinced by AMD’s latest announcements.
“While its ecosystem is not as mature as Nvidia, AMD is well positioned to be a key beneficiary of AI secular growth trends for the medium term, in our view,” Baird analyst Tristan Gerra told clients.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
