Shares of Advanced Micro Devices, Inc. (NASDAQ: AMD) surged in the pre-market trading Friday following remarks from Microsoft’s technology chief. He said that the chipmaker is bolstering its presence in artificial intelligence, which has long been dominated by NVIDIA Corporation (NASDAQ: NVDA).
Thus far this year, NVIDIA’s stock has nearly tripled in value, while AMD’s stock has risen by approximately 60%. Since the launch of OpenAI’s ChatGPT chatbot in late 2022, the tech industry has witnessed a surge of interest in advanced large language models requiring hefty processing power.
NVIDIA’s graphics processing units (GPUs) have been handling a substantial portion of these demanding workloads, leading the company to forecast a 170% year-over-year revenue growth for the current quarter. In June, AMD revealed that it would begin sampling its MI300X chip with clients in the third quarter. These GPUs were tailored specifically for the AI models.
Kevin Scott, Microsoft’s CTO, spoke at the Code Conference in Dana Point, California, and commended AMD’s increasingly compelling GPU offerings, foreseeing their growing significance in the marketplace in the years ahead.
Microsoft and AMD have maintained a long-standing partnership, with Microsoft seeking to diversify the high-powered chip market. Microsoft has already integrated AMD GPUs into its Azure cloud services and employed AMD chips in its computers and Xbox consoles.
In May, Advanced Micro Devices (NASDAQ: AMD) announced that Microsoft had begun offering a cloud networking service to clients, leveraging the chipmaker Pensando products.
At Code, Nilay Patel of The Verge questioned Scott about the feasibility of adopting AMD GPUs on a large scale and moving away from NVIDIA. Scott did not provide a direct answer but stressed that developers using AI programming tools should not have to concern themselves with the hardware details.
He did, however, acknowledge the value of healthy competition in the market.
Reports from Bloomberg in May hinted at a potential collaboration between AMD and Microsoft on a custom AI chip, although Scott refrained from confirming this during the conference. Meanwhile, the Microsoft cloud rivals Amazon.com, Inc. (NASDAQ: AMZN) and Google (NASDAQ: GOOG) have developed homegrown silicon.
Advanced Micro Devices stock is up over 1% at $103.99 at the time of publication.
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