AMD CEO Lisa Su delivered the opening speech at the COMPUTEX Forum in Taipei, Taiwan on June 3, 2024.
Wang An | Reuters
AMD The venerable computer chip maker said on Wednesday it would cut 4% of its global workforce as it seeks to gain a stronger foothold in the growing artificial intelligence chip sector dominated by Nvidia.
““To align our resources with the greatest growth opportunities, we are taking a series of targeted steps that, unfortunately, will result in an approximately 4% reduction in our global headcount,” an AMD representative said in a statement.
AMD had 26,000 employees as of the end of last year, according to U.S. Securities and Exchange Commission filings.
AMD is the second largest graphics processing unit (GPU) manufacturer after Nvidia. The company says artificial intelligence is one of its biggest growth opportunities. AMD shares will fall 5% in 2024, while Nvidia shares will rise 200%, making it the most valuable public company in the world.
AMD makes powerful artificial intelligence accelerators for data centers, including the MI300X, which companies like Meta and Microsoft buy as a replacement for Nvidia-based systems. But Nvidia dominates the market for powerful AI chips, with more than 80% market share, in part because it develops the core software that AI engineers use to develop programs like OpenAI’s ChatGPT.
AMD said in October that it expects AI chip sales to reach $5 billion this year, accounting for about one-fifth of AMD’s total FactSet project sales of $25.7 billion in 2024. $500 billion, but its total sales currently pale in comparison to Nvidia, which FactSet expects to reach $125.9 billion in revenue in 2024.
GPUs were originally developed for gaming and lagged behind AMD in gaming. According to FactSet data, AMD’s gaming division’s revenue is expected to drop 59% to $2.57 billion in 2024.
AMD also makes processor chips for laptops, desktops and servers, primarily competing with Intel. According to data from Mercury Research, its server CPU sales share increased by nearly 3% year-on-year in the third quarter, reaching 34%.
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