Advanced Micro Devices Inc. AMD CEO Lisa Su has addressed DeepSeek's AI advancements and their potential impact on the semiconductor market.
What Happened: During AMD's fourth-quarter earnings call on Tuesday, Su expressed optimism about the innovations in AI.
“The fact that there are new ways to bring about training and inference capabilities with less infrastructure actually is a good thing because it allows us to continue to deploy AI compute in broader application spaces and drive more adoption,” she stated.
Su also reinforced AMD's commitment to open-source AI, noting that DeepSeek's success aligns with the industry’s broader shift toward democratized AI models.
Regarding the future of AI chips, Su stated that while application-specific integrated circuits (ASICs) are part of AMD’s total addressable market, GPUs will continue to play a significant role due to their programmability and adaptability to evolving AI algorithms.
“My belief is, given how much change there is still going on in AI algorithms, that ASICs will still be the smaller part of that TAM [Total Addressable Market] because it is a more specific workload-optimized solution,” Su explained. “GPUs will enable significant programmability and adjustments to all of these algorithm changes.”
She noted that AMD’s portfolio spans CPUs, GPUs, and ASICs, positioning the company as a comprehensive compute partner for diverse workloads.
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Why It Matters: AMD’s fourth-quarter report revealed revenue of $7.66 billion, surpassing analyst expectations of $7.53 billion.
This performance underscores AMD’s robust position in the semiconductor industry, particularly in the data center segment, which saw a 69% growth.
The emergence of DeepSeek's low-cost AI assistant app from China has been a significant development in the AI landscape. DeepSeek says they spent only $5.6 million on semiconductor chips. That's about one-tenth of what companies like OpenAI and Meta have spent on chips for their AI apps.
When the market realized that the same AI performance could be achieved with fewer and slower chips, it hit companies supplying expensive chips.
On Jan. 27, Nvidia Corp.’s NVDA stock dropped 17%. In the days after the DeepSeek news, chip stocks and AI-focused companies saw a slight recovery.
However, the damage isn’t contained yet. The idea of a cheaper, equally effective way to build AI models still lingers.
Price Action: AMD's stock fell 8.84% in after-hours trading, closing at $108.94. Earlier on Tuesday, it ended at $119.50, up 4.58%, according to Benzinga Pro data.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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