AMD pivots to AI, lays off 1,000 employees amid growth in data centre business
Despite strong growth in its data centre segment, AMD’s gaming unit has suffered, prompting the company to prioritise AI chip production with the upcoming MI325X launch.
Advanced Micro Devices (AMD) has announced it will lay off approximately 1,000 employees, or 4% of its global workforce, as part of a strategic focus on the booming AI chip market. The company, which is competing with Nvidia in the rapidly growing sector, plans to prioritise investments in AI graphics processors. AMD’s data centre business has experienced impressive growth, with a significant revenue boost in the September quarter, while other segments, such as gaming, have seen declines.
AMD is preparing for the mass production of its next-generation AI chip, the MI325X, set to launch in the fourth quarter. The company’s research and development efforts have escalated, with rising costs reflecting the high demand for AI chips from major customers like Microsoft. Despite this, AMD’s stock has faced challenges in 2024 after a surge last year, as investor expectations remain high.
The company’s data centre unit is projected to grow significantly in 2024, outperforming total revenue growth. However, rising production costs and an expensive ramp-up in chip manufacturing have impacted its financial performance.
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