Move Aside, Nvidia: Meta, Microsoft Opt For New AMD Artificial Intelligence Chip

Advanced Micro Devices Inc.‘s AMD latest artificial intelligence (AI) chip, the Instinct MI300X, signals a potential challenge to Nvidia Corp.‘s NVDA dominance in the market.

What Happened: Technology giants Meta Platforms Inc. META, Microsoft Corp. MSFT, and OpenAI have announced their decision to adopt AMD’s chips.

The move, unveiled at an investor event, underscores the growing demand for cost-effective and powerful alternatives to Nvidia’s high-priced GPUs, which have been central to AI developments.

AMD’s Instinct MI300X, slated for release next year, boasts an innovative architecture. It has 192GB of HBM3 memory — pivotal for handling large AI models more efficiently.

AMD chief executive Lisa Su touted MI300X’s superior performance and user experience on CNBC’s Closing Bell. She predicts a staggering market growth to $400 billion by 2027 for the AI industry, with the larger part represented by GPUs.

Why It Matters: The AI market is advancing at a pace “never seen before,” presenting a unique opportunity for AMD to leverage its innovative products and roadmap, Su says.

The pricing of the MI300X remains undisclosed. However, given the high cost of Nvidia’s chips – around $40,000 each – AMD aims to position its product as a more affordable yet efficient alternative.

Meta plans to utilize the Instinct MI300X GPUs for AI inference tasks like AI stickers and image editing, while Microsoft intends to offer access to these chips through its Azure web service. Furthermore, Oracle Corp. ORCL ‘s cloud will also integrate these GPUs, reflecting a broadening interest in AMD’s offering.

AMD’s stock experienced a slight downturn, closing 1.3% lower on Wednesday. This decline occurred amidst a broader tech sector dip, which also saw Nvidia’s shares tumble by 2.3%.

AMD has seen its shares surge by 82% year to date, while NVIDIA soared by 218%.