(Reuters) – Advanced Micro Devices (NASDAQ:) is laying off 4% of its global workforce, or about 1,000 employees, as it shifts its efforts toward developing artificial intelligence chips in a bid to compete against the industry leader. Nvidia (NASDAQ:) industry.
AMD is considered Nvidia's closest rival in the lucrative market for chips that form the brains of complex data centers that can process large amounts of data used by generative artificial intelligence technology such as OpenAI's ChatGPT.
“As part of aligning our resources with our greatest growth opportunities, we are taking a number of specific actions,” an AMD spokesperson told Reuters on Tuesday.
Revenue at AMD's data center segment, which houses its ai graphics processors, more than doubled in the September quarter. On the other hand, the personal computer segment grew by 29%, while sales in its gaming unit fell by around 69% during the period.
Analysts expect the data center unit to grow 98% in 2024, outpacing expected total revenue growth of 13%, according to an average of estimates compiled by LSEG.
The company has been investing heavily to develop ai chips that command high selling prices and are in high demand among so-called hyperscalers like Microsoft (NASDAQ:).
AMD plans to start mass production of a new version of its artificial intelligence chip called MI325X in the fourth quarter of the year. Scaling up production of ai chips is an expensive undertaking due to limited manufacturing capacity.
The company's research and development costs rose about 9% in the third quarter, while its total cost of sales rose 11%.
AMD shares have fallen more than 3% so far this year, as the company struggles to live up to high investor expectations after Wall Street doubled its shares last year, betting on the linked returns. to artificial intelligence technology.
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