I speak lots about Nvidia. And for good cause…
Simply final month, the corporate posted a $44 billion quarter — one of many largest within the historical past of U.S. tech firms.
Nvidia’s knowledge middle enterprise alone made more cash than many Fortune 500 firms.
The corporate is the market chief in cutting-edge AI know-how. And when Nvidia’s CEO Jensen Huang speaks, it typically results in the information.
However this week, considered one of Nvidia’s greatest rivals was the one making headlines.
AMD’s CEO Lisa Su turned heads on the firm’s “Advancing AI” occasion when she stated she expects the marketplace for AI compute infrastructure to soar previous $500 billion within the subsequent three years.
Supply: Wikimedia Commons
However she didn’t cease there.
Regardless of Nvidia being the 800-pound gorilla on this house, Su prompt AMD has an actual shot at taking a number of the AI big’s market share.
Based mostly on what AMD showcased throughout the occasion, I imagine she is likely to be proper…
AMD’s Risk to Nvidia’s AI Dominance
Su went on to disclose a brand new chip from AMD referred to as the MI355X that’s designed to go toe-to-toe with Nvidia’s industry-leading AI processors.
The MI355X is AMD’s most aggressive AI chip but.
Supply: AMD
It’s a dense, high-performance accelerator that’s constructed to deal with the sorts of large workloads firms like OpenAI, Meta and Microsoft demand.
AMD claims its new chip collection is quicker than Nvidia’s counterparts and represents main positive aspects over earlier variations.
That alone is thrilling. However I’m much more intrigued by how AMD intends to compete on this house.
Slightly than mimicking Nvidia’s tightly built-in ecosystem, AMD is leaning into open requirements. It’s providing a extra modular, versatile strategy for firms that need management over their stack.
To that finish, Su previewed AMD’s new “Helios” rack system, a full end-to-end AI platform constructed round this open infrastructure.
She referred to as it: “a sport changer.”
These racks embody the whole lot a supercomputer wants, together with its brains (CPUs), muscle groups (GPUs) and quick web connections (NICs), all working collectively.
It’s an answer geared toward each frontier mannequin coaching and large-scale AI inference. And it precipitated my Spidey-sense to set off.
As a result of in the case of AI coaching, one firm prefers to play by its personal guidelines.
In fact, I’m speaking about Tesla.
On Could 20, Elon Musk advised CNBC that Tesla and xAI would proceed shopping for a whole lot of GPUs from Nvidia, but in addition “some from AMD” and doubtlessly others.
I don’t assume it’s loopy to learn extra into that assertion.
You see, Tesla is presently constructing out large compute clusters to help its Dojo supercomputer and energy its Optimus humanoid robotic.
The size of this effort is gigantic. And it requires {hardware} that’s quick, inexpensive and versatile.
Nvidia presents best-in-class efficiency, no query. But it surely comes bundled in what some engineers name a “black field.” In different phrases, it’s a closed system the place Nvidia controls almost each layer, from the chip to the software program stack to the networking gear.
For a corporation like Tesla — which has a protracted historical past of constructing in-house and optimizing from the bottom up — that form of vendor lock-in won’t be preferrred.
That’s why AMD’s open strategy is sensible to me right here.
It will let Tesla customise its AI infrastructure with out being tied to at least one proprietary ecosystem.
It might additionally decrease prices at a time when GPU provide continues to be constrained and costs stay sky-high.
If the MI355X delivers even near Nvidia’s efficiency, Musk might have each cause to start out shifting to AMD’s merchandise.
That’s very true for Optimus, which Musk stated may very well be “value greater than [Tesla’s] automobile enterprise and price greater than full self-driving.”
Supply: Wikimedia Commons
It’s additionally value noting that Tesla has made a behavior of quietly adopting AMD chips for in-vehicle purposes over the previous few years.
So this wouldn’t be the primary time Musk gave Su’s staff a shot.
Right here’s My Take
AMD’s inventory has fallen nicely beneath final yr’s highs.
Supply: Yahoo Finance
However that might quickly change.
I don’t imagine Tesla will abandon Nvidia in a single day.
However AMD simply made its most convincing pitch but, with a powerful product and a technique that offers firms like Tesla extra management.
I imagine it’s solely a matter of time earlier than we might see Elon announce a significant AI deployment constructed on AMD {hardware}.
And the 800-pound gorilla is likely to be in for a severe struggle.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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