AMD cuts 1,000 staff to focus on AI chips in battle with Nvidia

The company’s data centre segment has performed vastly better than its personal computer and gaming units this year

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AMD CEO Lisa Su holds a chip at the Computex forum in Taipei in June. Photo: Reuters

Published: 11:15am, 14 Nov 2024Updated: 11:46am, 14 Nov 2024

Advanced Micro Devices is laying off 4 per cent of its global workforce, or about 1,000 employees, as it directs efforts towards developing artificial intelligence (AI) chips in a bid to compete against industry bellwether Nvidia.

AMD is regarded as the closest rival to Nvidia in the lucrative market for chips that form the brains of complex data centres that can process the large mounds of data used by generative AI technology like OpenAI’s ChatGPT.

“As a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps,” an AMD representative told Reuters on Tuesday.

Revenue in AMD’s data centre segment, which houses its AI graphics processors, jumped more than twofold in the September quarter. On the other hand, the personal computer segment grew 29 per cent, while sales in its gaming unit slumped about 69 per cent during the period.

Analysts expect the data centre unit to grow 98 per cent in 2024, outpacing expected total revenue growth of 13 per cent, according to an average of estimates compiled by LSEG.

The company has been investing heavily to develop AI chips which command high selling prices and are in high demand among so-called hyperscalers like Microsoft.