AMD will reduce its global workforce as it focuses on developing AI chips
Advanced Micro Devices is laying off four percent of its global workforce, or about 1,000 employees, as it focuses its efforts on developing AI chips in an effort to compete with industry leader Nvidia.
AMD is considered Nvidia’s biggest competitor in the lucrative market for chips that power complex data centers that can handle the large amounts of data used by generative AI technology such as OpenAI’s ChatGPT.
“As part of aligning our resources with our greatest growth opportunities, we are taking a number of targeted steps,” an AMD spokesperson told Reuters on Tuesday.
Revenue in AMD’s data center segment, which houses its AI graphics processors, more than doubled in the September quarter. On the other hand, the personal computer segment grew by 29%, while revenue in the gaming unit fell by about 69 percent during the period.
Analysts expect the data center unit to grow 98 percent by 2024, ahead of the projected overall revenue growth of 13 percent, according to an average of LSEG estimates.
The company has invested heavily in developing AI chips that require high retail prices and are in high demand by so-called hyperscalers such as Microsoft.
AMD plans to begin mass production of a new version of its artificial intelligence chip, the MI325X, in the fourth quarter of the year. Ramping up production of AI chips is an expensive undertaking due to limited production capacity.
The company’s research and development costs rose nearly nine percent in the third quarter, while total sales costs rose 11 percent.
Shares of AMD are down more than three percent so far this year as the company struggles to meet high investor expectations after Wall Street delivered a double-digit rise in its shares last year, betting on the returns associated with AI technology.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
