Advanced Micro Devices, Inc. (NASDAQ:AMD) CEO Lisa Su provided insight into the near-term outlook for graphics processing units (GPUs), almost to the extent of taking a dig at rival Nvidia Corp (NASDAQ:NVDA) and hyperscalers such as Amazon.com Inc (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.
As AI models become more standardized, there is potential to create custom chips that are more power efficient, smaller, and cheaper.
According to the WSJ report, Su highlighted this opportunity, noting that GPUs are still the best choice for large language models due to their efficiency in parallel processing. However, there will likely be a shift to a wider range of chip architectures in the future.
Also read: Nvidia, AMD, Broadcom shares rise as Fed rate cut boosts AI chip sector
Recent reports indicate that AMD is focusing on the mainstream and mid-range GPUs and is withdrawing from the premium gaming GPU market led by Nvidia.
Nvidia GPUs, designed for gaming graphics, have played a key role in the company’s now trillion-dollar valuation.
Tech investor James Anderson expects Nvidia to reach a market cap of $50 trillion within the next decade. JPMorgan Analyst Harlan Sur expects AMD’s data center GPU revenue to grow by $5 billion in the current fiscal year.
Su emphasizes that the future of AI computing will involve a combination of different types of chips, including GPUs and new specialized chips.
For comparison, major cloud providers like Amazon and Google have developed their own AI chips for internal use.
Rival hyperscalers, including Oracle Corp (NYSE:ORCL) and Amazon have been working together lately, which BofA effects Analyst Justin Post expects demand for infrastructure and applications to increase, which will mean more demand for AI chips.
AMD shares have risen more than 60% in the past 12 months, while Nvidia has gained 175%.
Investors can gain exposure to the semiconductor sector through First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) and Columbia Semiconductor and Technology ETF (NYSE:SEMI).
Price promotions: AMD shares rose 0.28% to $156.39 before market close at last check on Monday.
Photo courtesy of AMD
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This article AMD exec predicts custom chips will outperform GPUs, sees shift in demand for AI chips: Report originally appeared on Benzinga.com
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