Advanced Micro Devices (AMD) is projecting strong growth in the data center chip market, anticipating it will reach $1 trillion by 2030, primarily fueled by advancements in artificial intelligence. CEO Lisa Su highlighted this forecast during the company's analyst day where she emphasized that AMD is strategically positioned to capitalize on this market expansion. The focus will be on AMD's range of products, including central processing units (CPUs), networking chips, and specialized AI processors.
The demand for AI technology is significantly contributing to the increasing market size, with AMD facing stiff competition from Nvidia, a leader in data center chips. Despite the competition, AMD has been gaining ground in the CPU sector, successfully competing against Intel.
Nvidia's CEO has made bullish predictions regarding the AI infrastructure market, forecasting it could reach between $3 trillion to $4 trillion by 2030. To stay competitive, AMD plans to launch its next-generation MI400 AI chips in 2026. These chips will cater to scientific applications and generative AI, alongside a new server rack offering comparable to Nvidia’s GB200 NVL72.
Additionally, AMD has been actively expanding its AI capabilities through strategic acquisitions, including server builder ZT Systems and several smaller software firms. This effort aims to bolster AMD's position in the AI sector and enhance its software development capabilities, as articulated by Chief Strategy Officer Mat Hein.
Last week, AMD released optimistic fourth-quarter revenue forecasts, driven by robust demand for AI chips. This trend aligns with the company's overall performance, as their data center CPU segment continues to flourish amidst rising AI investments.
In an effort to solidify its foothold in the AI market, AMD signed a multi-year partnership with OpenAI, the creator of ChatGPT. This partnership is expected to generate over $100 billion in revenue for AMD over the next four years, providing the company with a significant customer base while also granting OpenAI the option to acquire up to 10% equity in the chipmaker. Although AMD shares experienced a slight decline of 2.3%, the long-term outlook for the company's engagement with AI and data centers remains positive as it continues to navigate the rapidly evolving tech landscape.