AMD CEO Lisa Su unveiled the chip giant's latest line of products during a keynote speech at Computex 2024 in Taipei
AFP

Advanced Micro Devices (AMD) unveiled a new artificial intelligence chip on Thursday, challenging Nvidia's data center graphics processors (GPUs).

At an event announcing the new product in San Francisco, AMD said that the chip, called the Instinct MI325X, is set to go into production before the end of 2024. The chip aims to provide developers and cloud service providers with a strong alternative to Nvidia's offerings. It will compete with Nvidia's upcoming Blackwell chips, which are set to begin shipping in large quantities early next year.

"AI demand has actually continued to take off and actually exceed expectations. It's clear that the rate of investment is continuing to grow everywhere," AMD CEO Lisa Su said at the event.

In a press release, AMD announced "the latest accelerator and networking solutions that will power the next generation of AI infrastructure at scale: AMD Instinct MI325X accelerators, the AMD Pensando Pollara 400 NIC and the AMD Pensando Salina DPU. AMD Instinct MI325X accelerators set a new standard in performance for Gen AI models and data centers."

"Together, these products enable AMD customers and partners to create highly performant and optimized AI solutions at the system, rack and data center level," it said.

Forrest Norrod, executive vice president and general manager of Data Center Solutions Business Group, AMD, said that the company "continues to deliver on our roadmap, offering customers the performance they need and the choice they want, to bring AI infrastructure, at scale, to market faster."

"With the new AMD Instinct accelerators, EPYC processors and AMD Pensando networking engines, the continued growth of our open software ecosystem, and the ability to tie this all together into optimized AI infrastructure, AMD underscores the critical expertise to build and deploy world class AI solutions," Norrod added.

If cloud providers and developers find AMD's AI chips as good substitutes for Nvidia's, it could drive down Nvidia's prices. Nvidia has been enjoying high profit margins as demand for its GPUs surged over the past year.

The rise of advanced generative AI, such as OpenAI's ChatGPT, requires substantial data centers that utilize these GPUs, leading to a significant increase in demand for AI chips.

Nvidia has dominated the data center GPU market in recent years, with AMD in second place. Now AMD is aiming to capture a larger share of this market, projected to be worth $500 billion by 2028.

During the event, AMD's shares fell 2.5%, while Nvidia's rose by 1.2%, and Intel's shares dropped 0.7%.