GOLD RUSH: ‘The rate and pace of change in AI is certainly beyond anything that I’ve seen,’ Lisa Su said, as data center owners see ‘real value in their business’

Advanced Micro Devices Inc (AMD), Nvidia Corp’s nearest rival in artificial intelligence (AI) chips, predicted accelerating sales growth over the next five years, driven by strong demand for its data center products.

Annual revenue growth would average more than 35 percent over the next three to five years, AMD chief executive officer Lisa Su (蘇姿丰) said on Tuesday at a company event in New York.

AMD’s AI data center revenue would increase by an average of 80 percent over the same period, she said.

AMD chief executive officer Lisa Su delivers a speech at the Computex Taipei on June 3 last year.

Photo: Ann Wang, Reuters

AMD shares rallied in extended trading after executives also said adjusted profit would reach more than US$20 a share and operating margin would exceed 35 percent in that time frame.

AMD updated investors on its long-term outlook amid increasing concern that the massive spending on new computer systems for AI work cannot continue at the current elevated levels.

The chipmaker’s stock has almost doubled this year, helped by agreements signed with companies including OpenAI and Oracle Corp.

The biggest owners of data center are increasing their budgets for new gear as they see “real value in their business” for AI, Su told her audience.

“The rate and pace of change in AI is certainly beyond anything that I’ve seen,” Su said.

The biggest data center owners last year were predicting a slowing of the build-out, but Su said they are telling her they are going to accelerate the pace of investment.

“It’s not going to level off,” she said.

The total AI chip market, including accelerators, processors and networking products, would reach US$1 trillion by 2030, Su said.

The chipmaker’s recent agreements with OpenAI, Oracle and the US Department of Energy reflect increased interest in its MI series of AI accelerators. Those products, which go head-to-head with chips from Nvidia, are used in data centers to create and run AI services.

AMD’s leader was asked about concerns that OpenAI might not be able to fund the huge amount of spending that it has laid out.

She said that AMD’s deal with the ChatGPT developer is structured in a very disciplined way.

While the start-up is the most aggressive forecaster of future AI computing requirements, if projections for AI user growth and revenue pan out, there would be plenty of funding available, Su said.

“I wouldn’t bet against them,” she said.

For AMD’s long-range forecast, analysts, on average, estimated sales growth of 32 percent this year followed by expansions of 31 percent next year and 39 percent in 2027, according to data compiled by Bloomberg.

Analysts projected the company’s annual growth would slow later in the decade to 20 percent in 2028 and 12 percent in the following year.

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