Advanced Micro Devices’ (NASDAQ:AMD) CEO, Lisa Su, aims to challenge Nvidia’s (NASDAQ:NVDA) 85% market dominance in AI processors.
AMD’s MI300 line focuses on inference solutions that analyze new data using pre-trained AI models. To achieve this, AMD must dispel the notion that Nvidia processors are better because of its software. But some, like Lamini, find AMD’s ROCm software on par with Nvidia’s CUDA.
Despite Nvidia’s competition, AMD might seize opportunities. Nvidia faces antitrust scrutiny, potentially benefiting AMD. Lisa Su is optimistic about AMD’s AI market potential. With strong software and AI investments, AMD can lead in inference solutions.
AMD Acquires Nod.ai
AMD will acquire AI startup Nod.ai to enhance its software capabilities in the competition with Nvidia. NVDA’s decade of software development has given it an edge in the AI chip market. Now, AMD is investing in essential software for its AI chips.
The company commits to developing a comprehensive software suite to support its diverse chip lineup. AMD President Victor Peng affirms their strategy, combining internal investment with external acquisitions to achieve this goal.
Acquiring Nod.ai is part of AMD’s strategy, and it smoothens the release of AI models optimized for AMD chips. Nod.ai serves large data center operators. AMD hasn’t disclosed the deal’s terms. AMD established the AI group earlier this year, comprising approximately 1,500 engineers, mostly focused on software. The company intends to further expand the team by hiring 300 more in 2023 and even more in 2024.
AMD’s AI Group, led by Senior VP Vamsi Boppana, has been rapidly expanding. The acquisition of Nod.ai is their second in recent months, with ongoing plans for further growth in the coming year. When asked about future acquisitions, AMD’s President Victor Peng affirmed they are constantly exploring new opportunities.
Su Drives AMD to Success
In 2014, when Lisa Su became AMD’s CEO at the age of 53, the chipmaker was in dire straits, laying off a quarter of its staff and with a $2 share price. However, Intel’s stumbles and manufacturing issues opened doors for AMD. Under Su’s leadership, AMD secured deals with major companies like Lenovo, Sony, Google, and Amazon, whose data centers contributed $6 billion to the company’s sales.
Over nine years, Su’s technical brilliance, people skills, and business acumen revitalized AMD. With an MIT Ph.D., she ranks among S&P 500‘s highest-paid CEOs (2022 compensation: $30.2 million), amassing a $740 million fortune mainly in AMD stock. Panos Panay, Microsoft’s Chief Product Officer, lauds her turnaround efforts since 2014.
Su pivoted AMD towards competitive chip design. Yet, crafting groundbreaking chips is a lengthy process. During this period, AMD’s server market share dropped to just half a percent. However, Su kept engineers focused on innovative product development, understanding that engineers thrive when driven by remarkable projects.
What Now
AMD, a leading GPU provider, has seen a 34% drop in stock value, primarily due to its consumer-oriented focus. Yet, this could change with the upcoming MI300 chips designed for data centers, merging CPUs and GPUs into an AI-centric Accelerated Processing Unit (APU). While Nvidia dominates the AI chip sector, AMD aims to gain market share with its AI GPUs.
Su dismisses concerns about customers becoming competitors. She believes companies may want to make their components but acknowledges AMD’s unique technical expertise. She sees it as unlikely that customers can replicate AMD’s ecosystem. Su recognizes the challenge of maintaining success in the AI chip market but is motivated by the quest for a lasting legacy in contributions to the world.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.