AMD's AI Data Center Business Booms: CEO Says It's 'Closed A Good Part Of That Gap' With Nvidia

Advanced Micro Devices, Inc. AMD CEO Lisa Su provided a deeper look into the future of AMD's data center AI business during the company's earnings call on Tuesday and shared her view on competition in the market. 

The Details: AMD reported strong growth in its Data Center segment operating income which more than tripled compared to the prior year and accounted for 52% of total revenue in the third quarter. 

On the company's post-earnings conference call, Su highlighted partnerships with major AI players Meta, Microsoft, Oracle and others and projected sales to exceed $5 billion for the year. Su attributed the growth to the ramp of AI data center GPU revenue "as MI300X adoption expanded with cloud, OEM, and AI customers."

"Look, we’ve been extremely pleased with the progress there. I think the market environment has certainly gotten better over the last couple of quarters," Su said. 

Read More: AMD To Benefit From AI ‘Competitive Arms Race’: Goldman Sachs

The CEO also sees room for even more growth in the company's Data Center AI business and the size of the total addressable market (TAM). 

"In the Data Center alone, we expect the AI accelerator TAM will grow at more than 60% annually to $500 billion in 2028. To put that in context, this is roughly equivalent to annual sales for the entire semiconductor industry in 2023," Su said. 

The AMD CEO sees the company's roadmap strengthening over time and "closing the gap" with chip giant Nvidia Corp. NVDA. 

"We have, with our accelerated road map, actually closed a good part of that gap. I think MI325 is a great product. It’s going to compete very well with H200, and the MI350 series will compete very well with Blackwell," Su said on the conference call. 

She highlighted the spectrum of AI use cases and emphasized that there are "lots of opportunities across the set of AI workloads." Su also pointed to AMD's portfolio advantage from a data center retrofit standpoint because the infrastructure is the same and customers can update easily. 

"What I will say is customers are very, very open to AMD. And we see that everywhere we go, everyone is giving us a very fair shot at earning their business, and that’s what we intend to do," Su said. 

AMD Price Action: According to Benzinga Pro, Advanced Micro Devices shares ended Wednesday's session 10.6% lower at $148.60.  

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