Advanced Micro Devices (AMD) might rank among the old guard of the global technology industry, but it’s by no means out of ideas or inspiration – and the coming years could see it kick things up a notch.
The widespread public emergence of generative AI in late 2022 flipped the industry on its head and acted as a springboard for success for several major companies, including Microsoft, OpenAI, and most of all Nvidia.
The meteoric rise of Nvidia over the last two years has been nothing short of remarkable. Much of the generative AI ‘boom’ has been underpinned by Nvidia’s graphics processing units (GPUs), resulting in record profits, a surging market cap, and companies scrambling to get their hands on its hardware.
But for long-term rival AMD, Nvidia’s time in the limelight may have provided exactly the breathing room they needed. AMD hasn’t exactly been wallowing in a pit of despair over the flashy headlines or journalists fawning over the founder’s fashion sense. If anything, it’s been priming itself for a battle.
AMD has been a hive of activity so far in 2024 and there is a prevailing sense that it’s gathering momentum. Acquisitions in particular have been a key point of interest here, with the company having invested more than $1 billion between August 2023 and 2024 to expand the AMD AI ecosystem and bolster its software capabilities.
July this year saw the firm acquire Silo AI as part of a $665 million deal. This marked a significant moment for AMD, enabling it to greatly expand its portfolio of end-to-end AI solutions. Just one month later, we saw another marquee deal and a serious signal of intent for the company with the acquisition of ZT Systems for a whopping $4.9 billion.
ZT Systems provides AI and compute infrastructure for a host of major hyperscaler cloud providers. In bringing the company under its umbrella, AMD is taking another major step toward expanding both its AI chips and hardware business.
Commenting on the deal at the time, AMD chair and CEO Lisa Su said the acquisition will enable the company to “significantly strengthen” its data center AI systems and “customer enablement capabilities”.
“This acquisition also builds on the investments we have made to accelerate our AI hardware and software roadmaps," Su added.
Alongside other deals – including AMD’s acquisition of open source AI software firm Nod.ai in October 2023 – Su’s ambitious ‘roadmap’ is forming, as AMD cooks up a diverse range of offerings for customers akin to Nvidia.
AMD’s investments show it building a comprehensive ecosystem focused around its ‘open standards’ approach to AI. So far, this strategy appears to be paying dividends for the company. In its Q2 2024 earnings report, published in late July, we saw concerning results in one segment of the business but with a notable diamond in the rough.
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The firm’s revenue for the second quarter totaled $5.835 billion, marking a 9% year-over-year increase and a 7% boost quarter over quarter. Even as it marked a sizeable drop of 59% in its gaming hardware segment across the quarter – perhaps a discussion for another publication – AMD posted record sales of data center products and markedly increased sales of processors for client PC devices.
Data center hardware sales reached $2.834 billion in Q2 2024, up 115% year over year while its data center business unit recorded $743 million in operating income. That’s 405% higher than in the same quarter last year.
Overall, revenue for AMD’s data center segment surged by 21% compared to the previous quarter, underlining a period of rapid growth for the company.
Underpinning this impressive growth has been a sharp increase in shipments of both AMD Instinct GPUs and strong sales of its 4th generation AMD EPYC processors, both of which are proving highly popular for enterprises ramping up AI development due to their performance and efficiency.
AMD will be keen to capitalize on this performance moving into the closing months of the year and set itself up to challenge in 2025 onward. This week also marks an opportunity to set the stage and highlight this optimist at its Advancing AI event in San Francisco.
ITPro will be live on the ground in San Francisco covering the event, and we can expect to see a bullish stance from Su and AMD as at large as the company prepares for a fresh raft of product and service announcements.
