AMD is cutting 1,000 jobs to focus on artificial intelligence or AI technology. This decision of the company shows how important AI is becoming in the technology world. Big tech companies are investing in AI especially after seeing the success of AI chatbot ChatGPT.
AMD is mainly focusing on AI technology to increase revenue and stay competitive. The company's main competitor, Nvidia, has dominated the AI chip market. These Nvidia chips are quite expensive and they are in high demand. These chips are in high demand especially for managing large data centers for AI systems.
According to a Reuters report, AMD's AI chip-powered data center business is doing well. The company's revenue has doubled in recent months. But AMD is not getting much profit from its other businesses. While computer chip sales rose 29 percent, gaming chip sales fell 69 percent.
According to market analysts, AMD's data center business will grow 98 percent in 2024, much higher than the company's total expected growth of 13 percent. So AMD wants to invest more resources in developing their artificial intelligence (AI) chips.
But manufacturing and developing AI chips is not cheap. AMD's research costs for chip manufacturing rose 9 percent and manufacturing costs rose 11 percent. These advanced chips are expensive to manufacture, as there are not yet enough facilities to manufacture them and the technology is quite complex.
Later this year the new AI chip 'MI 325X; AMD plans to start manufacturing Big tech companies like Microsoft are interested in buying such chips for their data centers.
Despite these plans, AMD's share price has fallen more than 3 percent this year. Investors were very excited about AI technology last year and their share price doubled.
MMD is trying to adapt to the changes in the technology industry. For this, the company is taking tough decisions like layoffs. The company plans to invest more in AI. This is a clear signal that changes are coming to the computer chip industry, where AI is becoming more important than traditional computing needs.
References: India Today
