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AMD to cut 1,000 Jobs to boost AI chip production and rival Nvidia

Advanced Micro Devices is downsizing 04% of its global workforce or about 1,000 employees. The company is said to be redeploying those resources to intensify work on AI chips. The move will help the company capitalize on leader Nvidia's weakness in AI chip development. AMD is seen as Nvidia’s closest competitor in the race to provide data centre chips for generative AI, like OpenAI’s ChatGPT.

“As a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps,” an AMD spokesperson told Reuters on November 11. The sales of the AI graphics processors in the data centre segment in the September quarter soared more than twofold. While, its personal computer segment increased by 29% during the same period, its gaming unit sales reduced by approximately 69%.

In an average of estimates according to LSEG, analysts expect that the data centre unit will grow 98% in 2024, compared to a 13% growth for AMD’s overall revenue. AMD has been foraying great amounts to build the AI chips which are used at high selling prices and required by “hyperscalers” such as Microsoft.

Advanced Micro Devices wants to launch mass production of a new version of the MI325X artificial intelligence chip in Q4 this year. The scalability of producing more chips is a costly affair since the process involves limited manufacturing capability on AI chips.

The company’s research and development expenses increased nearly 9 per cent in the third quarter, and its total cost of sales increased by every bit of 11 per cent. Despite this push, the company’s stocks have declined by over 3% this year. Last year, investor excitement over AI growth doubled AMD’s stock price. Now, AMD’s intensified focus on AI chips marks its commitment to compete in this evolving market.