Global AI semiconductor revenue is expected to grow 26% to $67.1 billion in 2024. By 2027, AI chips revenue is expected to reach $119.4 billion. While Nvidia remains a leading player, rival AMD (AMD) is expanding its presence within the AI space.

 
AMD’s Financials

AMD was founded in 1969 by a group of tech experts under the leadership of Jerry Sanders. Initially, the company was building out memory chips, but it soon expanded and today is known for its product lineup that includes microprocessors, motherboard chipsets, embedded processors, graphics processors, FPGAs, and embedded system applications. The diversified portfolio of products has helped it expand into new markets including data centers, gaming, and more recently, the high-performance computing market.

AMD recently reported third quarter revenue of $5.8 billion, up 4% over the year. On a non-GAAP basis, AMD ended the quarter with $0.70 per share, growing 4% over previous year’s $0.67 per share. The market was looking for revenues of $5.68 billion with an EPS of $0.68 for the quarter.

By segment, Data Center revenue was flat at $1.6 billion, Client segment revenue grew 42% to $1.5 billion. Gaming segment revenue fell 8% to $1.5 billion, and Embedded segment revenue fell 5% to $1.2 billion.

For the fourth quarter, AMD expects revenue to be approximately $6.1 billion. Analysts expect AMD to end the year with revenues of $21.5 billion and an EPS of $2.60.

AMD’s Acquisitions

During the quarter, AMD announced the acquisition of French AI software leader Mipsology. Founded in 2015, Mipsology is known for its solutions focuses on providing AI inference, optimization solutions and tools tailored for AMD hardware. Its flagship product Zebra AI supports industry frameworks including TensorFlow, PyTorch, and ONNX Runtime. AMD expects that the acquisition will help accelerate AMD solutions for AI workloads. It will support the AMD Unified AI (UAI) Software Stack, which delivers a cohesive AI training and inference interface across edge, endpoint and cloud. Terms of the acquisition were not disclosed.

Earlier this year, AMD had also announced the acquisition of open AI software provider Nod.ai. The acquisition is aimed at bringing into AMD an experienced team that has developed technology that accelerates the deployment of AI solutions optimized for AMD Instinct data center accelerators, Ryzen AI processors, EPYC processors, Versal SoCs, and Radeon GPUs. It will help lower the barriers of entry for customers by providing access to developer tools, libraries, and models. Terms of the acquisition were not disclosed. Prior to the acquisition, Nod.ai was privately held and had raised $36.5 million in funding from various rounds. 

AMD appears to be strengthening its AI arsenal to compete with Nvidia.

The market is pleased with AMD. Its stock is currently trading at year high levels of $147.41 with a market capitalization of $238.2 billion. It was trading at $60.05 a year ago. The stock has done well this year, growing 48% during the year compared with a 7% increase in the S&P 500 index.

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