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AMD (NASDAQ:AMD) has transformed remarkably in the artificial intelligence (AI) space. Just a few years ago, the company had virtually no presence in artificial intelligence, focusing mainly on CPUs and GPUs for gaming and PCs. Under CEO Lisa Su’s leadership, Advanced Micro Devices pivoted aggressively, launching accelerators like the MI250 and MI300 series to compete in data centers.
Today, it’s recognized as an industry leader, powering AI training and inference for major clients. However, it still trails Nvidia (NASDAQ:NVDA) by a wide margin — Nvidia holds close to 90% of the AI chip market, with a superior software ecosystem like CUDA giving it an edge. Advanced Micro Devices’ market share lingers around 10%, and its chips often lag in performance for large-scale AI models. But as next-generation chips like the MI355X and MI430 debut, Advanced Micro Devices just got a big leg up through high-profile partnerships.
These collaborations validate its technology, provide real-world testing, and could accelerate adoption, potentially narrowing the gap with its rival significantly in the coming years.
A major catalyst for Advanced Micro Devices’ growth could be a new $1 billion partnership with the Energy Dept., which involves building two supercomputers, Lux and Discovery, to address critical scientific challenges like fusion energy, cancer treatments, and national security.
The first system, Lux, will come online in six months, using AMD’s MI355X AI chips, CPUs, and networking components. Co-developed with Hewlett Packard Enterprise (NYSE:HPE), Oracle (NYSE:ORCL), and Oak Ridge National Laboratory, it promises three times the AI capacity of current supercomputers. Advanced Micro Devices CEO Lisa Su called it the fastest deployment of its scale, emphasizing speed for U.S. AI efforts.
Discovery, set to begin operations in 2029, will leverage the MI430 chips, optimized for high-performance computing and AI. Energy Secretary Chris Wright highlighted how these machines will supercharge fusion research, recreating sun-like conditions on Earth for clean energy breakthroughs in two to three years. They’ll also simulate molecular-level cancer treatments, aiming to make most cancers manageable within five to eight years, and support nuclear weapons management.
This partnership narrows Advanced Micro Devices’s AI gap by providing government-backed validation, shared resources, and exposure in high-stakes applications. Unlike Nvidia’s dominance in consumer AI, Advanced Micro Devices gains traction in specialized HPC, where energy efficiency and integration matter.
The Energy Dept. will host the systems, with companies funding construction and both sides sharing compute power — paving the way for more such collaborations.
Importantly, it’s not just about building supercomputers, but about maximizing U.S. leadership in AI, making Advanced Micro Devices a core player in the global AI infrastructure arena.
Advanced Micro Devices’ momentum extends beyond supercomputers through work with big tech giants like International Business Machines (NYSE:IBM) on quantum computing. In a breakthrough announced two days ago, International Business Machines ran a quantum error-correcting algorithm 10 times faster than required using Advanced Micro Devices field-programmable gate arrays (FPGAs). This offloads error handling from quantum processors to affordable classical chips, freeing quantum resources for complex tasks.
Quantum errors are a major hurdle, but Advanced Micro Devices’ FPGAs proved superior, outperforming competitors including Nvidia in speed and cost-efficiency for this application. International Business Machines’ research marks a step toward practical quantum systems, with Advanced Micro Devices’s hardware enabling real-time corrections. This hybrid approach combines quantum’s power with classical reliability, positioning Advanced Micro Devices in emerging tech.
By excelling in quantum-AI integration, Advanced Micro Devices differentiates from itself from Nvidia, which leads in traditional GPUs but lags here. Such wins could attract more partners, boosting R&D and market share in next-gen computing.
Nvidia is not about to lose its lead anytime soon, with its entrenched ecosystem and massive scale. But Advanced Micro Devices, starting from a smaller base, can grow more rapidly through these partnerships and innovations.
Advanced Micro Devices has significant and leading expertise in supercomputers, with its processors and accelerators powering the world’s two fastest supercomputers currently in existence, El Capitan and Frontier. The company is a dominant force in the high-performance computing landscape.
This setup allows Advanced Micro Devices to gain market share, especially in niche areas like government HPC and quantum computing, potentially closing the AI gap while simultaneously boosting its valuation. By forging significant partnerships across the public and private sectors, look for Advanced Micro Devices to rapidly ascend to the trillion-dollar threshold.