AMD To Launch AI Chip Wednesday That Could Heat Up Competition With Nvidia

Key Takeaways

• Advanced Micro Devices Inc. (AMD) on Wednesday is to launch its latest chip designed for artificial intelligence (AI) systems.
• The launch event could feature a comparison with competing Nvidia products and an appearance from Microsoft, Wedbush analysts said in a research report.
• The new AI chip could allow AMD to better compete with Nvidia, with Jefferies analysts naming the two chipmakers as "top picks."

Advanced Micro Devices Inc. (AMD) is set to unveil its latest chip designed to power artificial intelligence (AI) systems on Wednesday, a move that could help the chipmaker compete with Nvidia (NVDA) amid the AI boom.

The company is to launch the Instinct MI300 data center graphics processing unit (GPU) accelerator, at Wednesday's AMD "Advancing AI" event. Alongside the new AI chip, AMD says it will "highlight the company's growing momentum with AI hardware and software partners."

AMD previously said it anticipates that MI300 will generate $2 billion in sales in 2024.

At the event, AMD could compare the capabilities of its new MI300 chip with Nvidia's H100, specifically highlighting memory content and bandwidth, Wedbush Securities analysts said in a Tuesday research note.

Nvidia, one of AMD's top competitors, has been touted as one of the "best positioned" companies to gain up to 80% market share from the AI craze, according to Jefferies LLC analysis.

Nvidia announced its latest and most powerful GPU, the H200, designed for use in AI, last month, although reports published in late November said that the chipmaker would delay the release of its new AI chip to 2024 due to server maker integration issues. The Nvidia chip delay comes amid investor concerns that U.S. restrictions on chip exports to China are a significant risk to Nvidia.

Microsoft (MSFT) could be involved in the AMD event, Wedbush suggested in its report, as the tech giant already announced that it will add AMD's new chip to Azure, its cloud computing segment.

Wedbush analysts have written that AMD could benefit from future growth driven by its present AI investments, while Nvidia "alone is likely to realize" a sales boost from an AI chip "over the intermediate term," compared with its competing chip makers.

Jefferies analysts noted that with the launch of the MI300 chip, AMD is a "top pick," alongside Nvidia, as the firm holds a "positive view" on U.S. AI chipmakers in 2024.

AMD shares, which have gained 85% this year, were down 0.3% in late trading on Tuesday.

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