AMD's AI segment will witness a tremendous "upturn" in the coming years since the prominent analyst Ming-Chi Kuo disclosed a "rapid growth" in the company's future revenue.
AMD's Shift of Focus Towards Its AI Segment is a Primary Reason Why Customers Are Seeing it As An Alternative To NVIDIA
If we place Team Red and Team Green in comparison, AMD has been overshadowed by NVIDIA's dominance in the AI domain, mainly due to the company's "early" efforts towards capitalizing on the AI frenzy, coupled with the superior software resources NVIDIA has. However, industry experts have hinted at the fact that AMD is expected to make a comeback soon, which can occur as soon as 2024.
AMD’s AI chip shipments are expected to grow rapidly in 2024 & 2025 / AMD 2024 & 2025年AI晶片出貨預期將快速成長https://t.co/6fsrZF4pOB
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) October 10, 2023
In a post on Medium, highly reputed analyst Ming-Chi Kuo reveals that AMD's AI chip shipments could see a decent increase in 2024. However, when compared to the lion's share of NVIDIA, the shipments are expected to amount to 10% of NVIDIA's "CoWoS-based" ones. This clearly portrays the fact that NVIDIA currently has the throne in the AI industry, and to come even close to the company will require huge efforts and several years. AMD has plans to acquire startups such as Nod.ai to catalyze their developments on AI software resources, but for now, a lot of work needs to be done.
Kuo forecasts the following for the AI segment between 2024-2025:
- My latest survey indicates that AMD’s AI chip shipments for 2024 (mainly the MI300A) will be about 10% of Nvidia’s (CoWoS-based).
- Microsoft is the largest customer for AMD’s AI chips in 2024 (with over 50% shipped to Microsoft), followed by Amazon. Meta and Google are currently testing AMD's AI chips, with Meta being more likely to be the next CSP customer for AI chips.
- AMD’s primary target market for its AI chips is CSPs, as CSPs have superior software capabilities that can address AMD’s software weakness.
- In 2025, CSPs are still expected to be the main customers for AMD’s AI chips. If the cooperation between Microsoft and AMD goes well and wins orders from Meta and Google, AMD’s AI chip shipments are expected to significantly reach 30% or more of Nvidia’s (CoWoS-based) in 2025.
Moving on, the analyst predicts that Microsoft will be AMD's largest customer, amounting to the majority of the share in the company's AI shipments. Firms like Meta and Amazon are also looking at AMD as an alternative, but this yet again depends on how AMD delivers to Microsoft. Speaking of Microsoft, we reported that the company in collaboration with OpenAI is developing "homegrown" AI chips for itself as well, which shows that either the firm is aiming for complete independence or looking for someone other than NVIDIA as a supplier.
AMD's significance in the AI industry is completely reliant on the company's approach towards its software resources, as well as next-gen tech such as the Instinct MI300 & MI400 accelerators which are the company's No.1 strategic plan to grab that market share. If AMD succeeds in gaining the trust of potential clients, its AI shipments could grow up to 30% (compared to NVIDIA's CoWoS-based ones), which will indeed be a huge accomplishment for Team Red. The company already made major strides with its EPYC CPU lineup in the server, workstation, and data center markets but to achieve similar strides within the AI segment against competitors such as NVIDIA, the red team may need to act quickly.
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