AMD CEO Lisa Su delivers the opening speech at the COMPUTEX Forum in Taipei, Taiwan, on June 3, 2024.
Wang An | Reuters
AMD On Wednesday, the company said it would cut 4% of its global workforce as the veteran CPU maker seeks to gain a stronger foothold in the growing field of artificial intelligence chips 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 (SEC) 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 produces powerful artificial intelligence accelerators for data centers, Including MI300X, Companies such as Meta and Microsoft purchase these products as alternatives to 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 expected AI chip sales to reach $5 billion this year, about one-fifth of AMD’s total FactSet project sales of $25.7 billion in 2024. to $500 billion — but its total sales currently pale in comparison to Nvidia’s, which FactSet expects to hit $125.9 billion in revenue by 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%.
