On October 10, 2024, AMD unveiled their new artificial intelligence (AI) chip, the Instinct MI325X, which is intended to compete directly with Nvidia’s popular data center graphics processors, commonly known as GPUs. This move is noteworthy because Nvidia has long led this sector, especially with its forthcoming Blackwell processors expected to ship in early 2025.
The MI325X is intended to appeal to developers and major cloud service providers, which might generate competition for Nvidia and perhaps cut its prices. Nvidia has made significant profits because to the huge demand for its GPUs, which account for around 75% of the market’s gross margins. The growing need for AI, particularly for strong applications such as OpenAI’s ChatGPT, has boosted the need for additional AI processors.
For years, Nvidia has been the industry leader in the data center GPU sector, but AMD is now attempting to improve its market share, with a market estimated to be worth $500 billion in 2028. Lisa Su, AMD’s CEO, stated that AI investment is fast increasing, beyond earlier forecasts.
Although AMD did not name any new big clients for the MI325X at the introduction, it has previously revealed that firms such as Meta and Microsoft buy its AI GPUs, with OpenAI also using them for certain applications. The MI325X’s pricing, which is generally supplied as part of a full server package, was not disclosed by the business.
With this new technology, AMD is accelerating its product release timetable in order to compete more effectively with Nvidia, with plans to produce new CPUs each year. The MI325X succeeds the MI300X, which began arriving late last year. Future chips will include the MI350 in 2025 and the MI400 in 2026.
This launch is critical for AMD since it will compete directly with Nvidia’s future Blackwell processors. A successful release of the MI325X might pique investor interest, especially because AMD’s price has only climbed 20% in 2024, and Nvidia’s stock has surged by more than 175%. Despite this, AMD’s stock fell 4% on the day of the release, while Nvidia’s increased around 1%.
One of AMD’s hurdles is Nvidia’s proprietary programming language, CUDA, which has become the industry standard among AI developers. This ties many developers to Nvidia’s ecosystem. In response, AMD has improved its own software, ROCm, to make it easier for developers to migrate their AI models to AMD processors.
AMD markets its AI processors as being particularly efficient for jobs where AI models create content or make predictions, rather than just processing massive volumes of data. According to the business, the MI325X may outperform some Nvidia solutions by up to 40% on specified activities.
In addition to its AI initiatives, AMD continues to create central processing units (CPUs), which are required by most servers. AMD reported a strong growth in data center sales over the last year, totaling $2.8 billion, with AI processors accounting for around $1 billion. While AMD accounts for around 34% of the data center CPU market, Intel continues to lead with its Xeon range.
AMD also unveiled its new EPYC 5th Gen CPUs, which come in a variety of configurations designed to improve data processing for AI applications. These CPUs are crucial because they work with GPUs to efficiently power AI applications.
In essence, AMD’s new MI325X processor is a huge step forward in the competitive landscape of AI technology, attempting to challenge Nvidia’s long-held market supremacy.
Source: Leswing, Kif. “AMD launches AI chip to rival Nvidia’s Blackwell.” CNBC, October 10, 2024. You can check out the full article here.
Hi, I'm Voss Xolani, and I'm passionate about all things AI. With many years of experience in the tech industry, I specialize in explaining the functionality and benefits of AI-powered software for both businesses and individual users. My content explores the latest AI tools, offering practical insights on how they can streamline workflows, boost productivity, and drive innovation. I also review new software solutions to help readers understand their features and applications. Beyond that, I stay up-to-date with AI trends and experiment with emerging technologies to provide the most relevant information.