A senior AMD executive has indicated the company’s future chip enhancements will be aimed at boosting AI performance, moving away from a focus on high-end gaming systems.
For those purchasing chips in large volumes, AMD’s pivot towards AI represents a crucial shift in their strategy. “For major chip buyers, AMD’s embrace of AI is indicative of a significant shift in their market focus,” commented Scott Dylan, managing partner at NexaTech Ventures, a venture capital firm in London that specializes in AI and tech startups.
“AMD’s choice to shift focus from leading gaming GPUs to AI is strategically sound, financially,” noted Dylan. “With a mature gaming GPU market and Nvidia’s dominant presence in high-end gaming, AMD’s move away from trying to compete at the top tier with Nvidia appears to be a wise allocation of resources. By concentrating on AI chip development, such as their EPYC and MI300 series used in data centers, AMD is positioning itself as a key competitor in a sector where the demand for AI accelerators continues to rise rapidly.”
The strategic change within AMD was highlighted through comments made by Jack Huynh, the general manager of AMD’s computing and graphics business group, in two different articles published by Tom’s Hardware.
In one, Huynh explained how AMD had initially divided its GPU microarchitecture into two distinct families in 2020: RDNA for gaming and CDNA for high-performance computing and AI tasks in data centers. However, AMD now intends to merge them again under a new designation, UDNA.
“We forked it because then you get the sub-optimizations and the micro-optimizations, but then it’s very challenging for these developers, especially as we’re expanding our data center business, so now we need to unify it,” he mentioned to Tom’s Hardware.
While this suggests that the designs will be fine-tuned for performance across both segments, his additional comments indicate that the aim will predominantly be to deliver superior AI performance at the minimal total cost of ownership (TCO), with an ambition to capture more market share in gaming.
“In the server segment, when we achieve absolute leadership, we gain market share because it is very TCO-driven. In the client segment, even if we offer a superior product, the increase in market share is uncertain due to marketing approaches and developer relations; that’s the main distinction,” Huynh explained to Tom’s Hardware.
“My priority right now is to build scale for AMD. Because without scale right now, I can’t get the developers,” he mentioned regarding his strategic approach to gaming consoles and PCs market. “If I tell developers, ‘I’m just aiming for 10 percent of the market share,’ they simply respond, ‘Jack, I wish you well, but we need to stick with Nvidia.’ So, I need to present them a strategy depicting, ‘Look, we can capture 40% market share with this plan.’ Then their tune changes to, ‘Now you have my support, Jack. I’ll begin optimizing for AMD.’ Securing that shifts us closer to leading the market,” he explained to the PC hardware publication.
This development doesn’t come as a shock, given AMD’s previously indicated keenness towards AI hardware and the challenges Intel faces in AI perception. Although AMD has slightly advanced over Intel, there remains skepticism about the sufficiency of these modest gains.
Dylan from NexaTech perceives a potential emphasis on chip price-performance as beneficial for consumers.
“Nvidia’s stronghold in AI chip development till now has led to supply limitations and high prices in times of soaring demand,” he commented. “However, AMD’s strategic shift could lead to a more equitable market, potentially lowering prices and improving delivery times for bulk orders,” he concluded.
For anyone sourcing chips for AI workloads, this is good news, he said. “The AI market is obviously still in its growth phase, and by focusing its resources here, AMD can innovate faster and provide more competitive pricing and performance-per-dollar ratios. This benefits buyers looking for scalable AI offerings across sectors like healthcare, autonomous systems, and financial services.”
