AMD to Cut Workforce in Evolving AI Chip Strategy

Chipmaker AMD announced it will lay off 4% of its global staff as it attempts to consolidate its place in the growing AI chip market that is dominated by rival Nvidia. This announcement means that roughly 1000 of the company’s 26,000 workforce will lose their jobs. 

AMD said the move was part of its broader strategy to focus its resources toward growth sectors, especially artificial intelligence. The company is looking to compete more aggressively in a market where Nvidia holds over 80% of market share 

AMD is the world's second-largest producer of GPUs behind Nvidia and has seen a mixed financial year. Its stock is down 5% in 2024, in stark contrast to Nvidia's eye-watering 200% surge. This has made Nvidia the most valuable publicly traded company globally. 

Despite the size of the task, AMD remains committed to its AI strategy, expecting $5 billion in AI chip sales this year, contributing to around 20% of its projected $25.7 billion in total revenue for 2024. Nvidia, on the other hand, is expected to post $125.9 billion in revenue, demonstrating its dominant lead in the sector.

AMD’s AI accelerators, including the MI300X, are used by major tech companies like Meta and Microsoft but mainly as an alternative if they cannot source Nvidia’s products. Nvidia's deep integration into AI software development, including platforms like ChatGPT, has made it the undoubted leader in the industry.