Last Tuesday, Advanced Micro Devices Inc (AMD  ) unveiled a new chip that holds the promise to be the biggest threat to date to the monopoly of the AI chip market leader, Nvidia Corporation (NVDA  ). GPUs are undoubtedly powering the AI race, as these chips are used by OpenAI that built ChatGPT which seems to have started all the hype and certainly brought in a lot of good vibes to Microsoft Corporation (MSFT  ).

The MI300X

Targeted as a competitor to H100 GPU from Nvidia, AMD's forthcoming most-advanced GPU for artificial intelligence applications is expected to arrive to customers later this year. Its CDNA architecture is designed for large language models that use lots of memory as well as other cutting-edge AI models. AMD did not disclose any pricing details but lower pricing will not only put a price pressure on Nvidia whose H100 comes at $30,000 or more, but also have a deep impact on the development of generative AI applications that are high in cost.

The AI Opportunity And Untapped Market

While the PC market struggles to get out of its post-pandemic slump, CEO Lisa Su finds AI to be AMD's largest and by far the biggest strategic long-term growth opportunity.

According to Analysts, AMD is certainly one of the greatest challenges to Nvidia especially with this new release that AMD will sell to everybody, but the key of its success remains lies in how many developers will want to use it. For example, AI developers preferred Nvidia chips due to a well-developed software package CUDA that enabled them to access the chip's core hardware features. But AMD revealed on Tuesday it made its own software for its AI chips, ROCm. If developers embrace AMD's chips, named by the company as accelerators, as a substitute for those made by Nvidia, the AI chip market is certainly in for a power shift and AMD is in for a turnaround as its current brand identity is tied to traditional computer processors.

Reuters reported that Amazon.com Inc (AMZN  ) is considering AMD's chips but still hasn't decided which chips will power its AI efforts, however Amazon has not made any public commitments. Dave Brown, vice president of elastic compute cloud at Amazon, did state that AMD and AWS teams are working together, while Amazon declined to work with Nvidia on the DGX Cloud offering. But, it is common knowledge that Amazon, more precisely AWS, likes to design its serves from the ground up. For example, when it started selling H100 chips that Nvidia makes, it did it as part of its design.

Intel Is The Living Proof That Future Is Promised To No One

On Friday, Intel Corporation (INTC  ) revealed it will be committing $4.6 billion in its new chip assembly and test facility in Poland as part of its plan to build capacity across three continents and restore its chip making leadership position. Last year, Intel announced it will be building a massive chip complex in Germany, as well as facilities in Ireland and France. Intel also announced yesterday that after 15 years, it is rebranding its consumer CPU. With a simplified naming scheme that focuses on its Core branding, many have noticed the new looks somewhat similar to AMD's Ryzen naming scheme. After being the unquestioned leader with an almost market monopoly for over a decade, Intel is no longer fighting only against AMD who was its chief rival but also with Nvidia who took absolute charge because it was the first to enter the AI game and it did it early. But as Google and Amazon design their own chips, even Nvidia will be facing increased competition.

AMD's AI Journey Could Be A Game-changing One

AMD president Victor Pen admitted that this is a journey but assured AMD has made great progress in building a powerful product that works with various systems, models, libraries and frameworks. All in all, it seems like AMD's newest chips have the potential to redefine the AI chip landscape.

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