Despite the growing attention that Artificial Intelligence (AI) is attracting in the world of technology, AMD continues to find its biggest source of profits in data centers. This was highlighted by Jean Hu, Vice President and CFO of AMD, during her speech at the Nasdaq Investor Conference, held recently in London.
Hu emphasized that data centers continue to provide the highest gross margins to the company and expects their impact on AMD’s business lines to continue growing in the coming years. “Data centers have grown much faster than other areas of business,” Hu stated, noting that CPU cores remain crucial for numerous workloads.
Despite some challenges in the first quarter of the year, especially in the integration area, Hu assured that AMD has improved its gross margin and will continue on this trajectory throughout the remainder of 2024.
Diversification and Technological Advances
AMD has not limited itself to data centers and is also advancing in the manufacturing of components designed for AI work. The company recently announced the Ryzen AI 300 platform for laptops, equipped with a 50 Tops neural processor, and the Ryzen 9000 desktop chips range.
In the realm of GPUs, AMD introduced the MI325 GPU accelerator, with 288 GB of HBM3E memory and a bandwidth superior to its competitor, Nvidia. Hu also revealed that the MI350, based on CDNA4 architecture, will be launched in 2025, and the MI400, competing with Nvidia’s future Rubin platform, will follow in 2026.
Evolving Server Market
Hu pointed out that the traditional server market, those not dedicated to AI tasks, remains divided. Despite a decrease in 2023, AMD has made progress with its Epyc Gen 4 server CPU platforms, achieving a 33% market share against Intel in the first quarter of 2024. The executive highlighted the first signs of a renewal cycle in this market.
Furthermore, AMD offers CIOs the opportunity to reduce costs with its latest server platforms, which can provide the same computing power with 40% fewer servers. Hu emphasized that while AI-configured servers have attracted significant investment, other workloads remain essential.
Competition in the Enterprise Sector
In the competition with Intel in the enterprise computer market, Hu indicated that it is a completely different market from consumer systems, requiring a different approach. AMD has been working intensively over the past two years to address this sector, hiring an IBM sales manager to improve its targeted sales approach for enterprises.
For now, AMD’s success in this sector has come from the server side, showing CIOs the benefits of total cost of ownership to encourage the choice of AMD servers. However, in the PC market for enterprises, AMD faces a longer and more challenging process, needing to convince CIOs of the need for change to improve its market share.
In summary, while AI continues to capture much attention, AMD continues to find its main source of profits in data centers, while also remaining committed to innovation and technological advancement in other key sectors.