Advanced Micro Devices (AMD) has set its sights on capturing a significant portion of the exploding data center chip market, which CEO Lisa Su predicts will reach a staggering $1 trillion by 2030. The announcement came during the company's analyst day event held at the Nasdaq in New York on Tuesday.
AI Driving Unprecedented Growth
According to Su, artificial intelligence will be the primary catalyst propelling the data center chip market to its trillion-dollar valuation. The projected $1 trillion market encompasses AMD's central processing units, networking chips, and specialized AI processors, positioning the company for substantial growth in the coming years.
"It's an exciting market," Su emphasized during her presentation. "There's no question, data center is the largest growth opportunity out there, and one that AMD is very, very well positioned for."
Competitive Landscape and Strategic Moves
AMD finds itself in a fierce competition with rival Nvidia, which has been aggressively capturing market share in the booming data center chip segment. While Nvidia CEO Jensen Huang has projected an even larger AI infrastructure market of $3 trillion to $4 trillion by 2030, AMD has been making strategic moves to strengthen its position.
The chip designer announced its next-generation MI400 series of AI chips, scheduled for launch in 2026. The MI400 will include multiple variants specifically designed for scientific applications and generative AI tasks. Alongside these new chips, AMD plans to introduce a complete server rack solution, similar to Nvidia's GB200 NVL72 product.
Expansion Through Acquisitions and Partnerships
AMD has been actively building its AI capabilities through strategic acquisitions. Su highlighted the company's recent purchases, including server builder ZT Systems and several smaller software companies. Chief Strategy Officer Mat Hein revealed that AMD has been acquiring startups focused on AI software development, with the most recent being MK1 on Monday.
"We'll continue to do AI software tuck-ins," Hein told Reuters, emphasizing the company's strategy to enhance its software capabilities and talent pool.
Perhaps the most significant development is AMD's multiyear partnership with ChatGPT creator OpenAI, signed in October. The deal is expected to generate over $100 billion in new revenue for AMD over four years from OpenAI and other customers. As part of the arrangement, OpenAI received warrants to purchase up to 10% stake in the chipmaker.
This partnership represents a crucial victory for AMD, which hasn't captured the same level of returns from the AI spending boom as Nvidia has thus far. The company's recent financial performance has shown promise, with fourth-quarter revenue forecasts exceeding Wall Street estimates, driven largely by demand for AI chips.
AMD shares closed down 2.3% at $238.31 on Tuesday following the announcements. The company last held an analyst day in 2022, making this year's event particularly significant for investors watching the AI chip space.
