AMD has announced that it plans to slash its global workforce by 4%, or around 1,000 employees. This comes as the computer chipmaker aims to boost its position in the expanding market for artificial intelligence chips, which is currently led by Nvidia.
″As a part of aligning our resources with our largest growth opportunities, we are taking a number of targeted steps that will unfortunately result in reducing our global workforce by approximately 4%," an AMD representative said in a statement cited by CNBC. "We are committed to treating impacted employees with respect and helping them through this transition."
As per a U.S. Securities and Exchange Commission filing, the Silicon Valley giant, which builds chips for artificial intelligence companies and for video gaming, had at least 26,000 employees at the end of 2023.
Just last month, AMD launched a new artificial intelligence chip, the Instinct MI325X, to compete with Nvidia's data center graphics processors, known as GPUs. It plans to begin bulk production of the chip in the last quarter of this year. AMD believes the total market for AI chips will be $500 billion by 2028.
"AI demand has actually continued to take off and actually exceed expectations. It's clear that the rate of investment is continuing to grow everywhere," AMD CEO Lisa Su said during the launch of the new chip in October, as per CNBC.
AMD views AI as one of its primary growth opportunities and is currently the second-largest producer of GPUs, trailing behind Nvidia. While AMD's shares have declined by 5% this year, Nvidia's stock has skyrocketed by 200%, making it the "most publicly traded company in the world."
Currently, AMD produces the MI300X, a powerful AI accelerator utilized by major data centers, including prominent companies such as Meta and Microsoft, which consider the AMD chip a viable alternative to Nvidia-based systems.
Additionally, AMD projects its AI chip sales to reach $5 billion this year, a figure that falls short of FactSet's projections -- $25.7 billion in total sales. FactSet estimates Nvidia's sales for 2024 to be around $125.9 billion.
Aside from making GPUs, the company also makes processor chips for desktops, laptops, and servers, where it is also competing with Intel.
