Nvidia vs AMD: AMD launches AI enabled chipset! Will AMD challenge Nvidia’s AI dominance?

Advanced Micro Devices (AMD) unveiled its new AI-enabled chip on June 13, 2023 as a rival to market leader Nvidia’s chipsets. AMD shared details of its chip called as M1300X which is in direct competition to the widely used Nvidia H100. 

This comes at a time when semiconductor shares are witnessing a sudden surge in investor demand purely due to the rise of softwares such as ChatGPT and Google Bard. 

To put things in perspective, AI focussed companies like Nvidia and AMD have nearly doubled their share price value since January this year. Other AI shares like Micron Technology, Palantir Technologies and C3.ai have all reported double digit growth during the same period. 

Nvidia vs AMD: How does AMD MI300X stack up against Nvidia H100

AMD’s MI300X chip architecture was specifically developed to cater to the demands of large language and advanced AI models. ChatGPT and Bard and large language models require powerful chips and cloud services to run smoothly. 

AMD’s chip has a maximum memory capacity of 192 gigabytes, helping the M1300X accommodate even larger AI models than other chips like Nvidia’s H100 chip, which supports a maximum of 120 GB of memory.

When it comes to pricing, Nvidia’s H100 AI chipset costs about $30,000. AMD is yet to price its chipset offering, but it is expected to be priced to provide tough competition to Nvidia. 

Nvidia vs AMD: Does AMD AI chipset have any takers?

According to a report by Reuters, Amazon Web Services, the world's largest cloud computing provider, is considering using new artificial intelligence chips from Advanced Micro Devices, though it has not made a final decision.

While AWS has not made any public commitments to use AMD's new MI300 chips in its cloud services, Dave Brown, vice president of elastic compute cloud at Amazon, said AWS is considering them. To read the entire report, click here.

Nvidia vs AMD: Latest Financials

Nvidia

• Nvidia reported revenue for the first quarter of FY24 of $7.2 billion, down 13% from a year ago and up 19% from the previous quarter.
• While the company's data center and AI chip business seems to be firing up, its legacy gaming business has witnessed a steep slowdown over the past few quarters. 
• Gaming revenues slipped to $2.2 billion from $3.6 billion in the same quarter last year. 

AMD

• Q1 Revenue dropped 9% from $5.89 billion a year earlier.
• Net loss swung to $139 million, or 9 cents per share, from a net income of $786 million, or 56 cents per share, during the year-earlier period
• The biggest revenue decline came in AMD’s client group, which includes sales from PC processors.

Nvidia vs AMD: Analyst View

• Jefferies believes AMD’s processors for servers can take material share from Intel’s DCAI business over the next year; raises AMD share price target to $145 from $100. 
• Bernstein has a ‘market perform’ rating on AMD shares as it thinks the overall AI opportunity is still very early and AMD's efforts strike as "somewhat late" when going up against competitors. 
• JP Morgan AMD has improved its competitiveness across CPU and GPU products and is on track to improve its market share and drive meaningful rev growth in the near term.

This is not investment advice. Investments in the securities market are subject to market risk, read all the related documents carefully before investing. Past performance is not indicative of future returns.