AMD reaffirms that datacenter remains the strategic priority despite industry AI market hype.

AMD's chief financial officer Jean Hu stated at the Nasdaq Investor Conference in London that datacenter remains the chipmaker's major profit engine, with CPU cores still key for many workloads. When asked about gross margins and which business area would have the greatest impact, Hu indicated datacenter would continue to be the focus. "Datacenter has been growing much faster than our other businesses. Despite a headwind on the embedded business side, we were able to improve gross margin," she said, referring to Q1 of this year. Hu added that the same dynamics would continue in the second half of 2024, noting that "the major driver for gross margin improvement continues to be datacenter, and I think next year, it will be a similar picture."

Despite the focus on datacenter, Hu highlighted AMD's recent announcements at Computex, including the Ryzen AI 300 Series laptop platform with a 50 TOPS neural processor and Ryzen 9000 Series chips for desktops. On GPU accelerators, Hu discussed the forthcoming MI325, announced at Computex, which will have 288 GB of HBM3E memory with "significant memory capacity and bandwidth better than our competition," referring to Nvidia's current lineup. Looking forward, Hu revealed that "next year, we are introducing MI350, which is based on CDNA 4, a new architecture, which is also going to have a 288 GB HBM3E memory," claiming it would boost performance by 35x to compete against Nvidia's Blackwell B200. An MI400 will arrive in 2026 to compete against Nvidia's "Rubin" platform scheduled for the same year.

In response to questions about traditional servers, Hu said the market is "still quite mixed" and noted that "last year, we all know the traditional server market actually declined." However, AMD has gained momentum with its Gen 4 Epyc server CPU platforms, achieving 33 percent market share against rival Intel in Q1. Hu claimed that AMD's latest server platforms can provide the same amount of compute with 40 percent fewer servers, allowing organizations to cut capex and reduce operating costs by 40 percent. She emphasized the continued importance of CPU cores for traditional foundational applications, stating: "When you look at the traditional foundational applications, your ERP system, your database and your shopping website, your Meta, Facebook, Instagram, all those things, you don't need the GPU – the CPU has the best TCO for those kind of foundational traditional applications. And those things continue to increase."

Hu highlighted that with 192 cores in the upcoming Turin Epyc chips with Zen 5 cores, AMD is addressing significant problems in general compute, with core counts increasing double-digit from both AMD and its competition. On the enterprise PC market, Hu stressed this requires a different approach than consumer systems. "If you look at the enterprise side, enterprise really requires different go-to-market," she explained, noting that each organization and CIO procures differently. AMD hired its new chief sales officer from IBM, whose objectives focus on enterprise go-to-market approach, providing "not only more feet on the street, but also understand how to approach the enterprise customer." Hu concluded that converting enterprise CIOs to choose AMD servers has succeeded by demonstrating total cost of ownership benefits, and the same approach is necessary on the PC side: "And the same thing on the PC side, you literally have to convince enterprise CIOs to change in order to expand your market share," she said, noting that this takes longer.