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AMD to Cut 4% of Jobs in Strategic Shift Toward AI

AMD to Cut 4% of Jobs in Strategic Shift Toward AI
 

AMD, the prominent computer chipmaker, announced on Wednesday that it will reduce its global workforce by approximately 4%, resulting in around 1,000 job cuts. This strategic move aligns with the company’s efforts to strengthen its position in the rapidly growing artificial intelligence (AI) chip market, a domain currently dominated by Nvidia.

At the end of last year, AMD reported having about 26,000 employees, according to filings with the U.S. Securities and Exchange Commission. Despite being the second-largest producer of graphics processing units (GPUs), AMD has faced significant challenges as it competes against Nvidia, which holds over 80% of the market share in powerful AI chips.

 

Focus on AI Growth

AMD’s decision to realign its resources underscores its commitment to capitalizing on AI advancements. The company has been developing AI accelerators like the MI300X, used by major tech companies such as Meta and Microsoft as alternatives to Nvidia systems. In October, AMD projected $5 billion in AI chip sales for the year, a substantial portion of its anticipated $25.7 billion in total sales for 2024.

 

Market Dynamics

Despite these efforts, AMD’s stock has fallen by 5% in 2024, while Nvidia’s shares have surged by 200%, making it the most valuable publicly traded company globally. AMD remains optimistic, however, predicting the AI chip market could reach $500 billion by 2028.

 

Challenges in Other Segments

Alongside its AI endeavors, AMD continues to produce processor chips for various computing devices, competing with Intel in the server CPU market. The company saw its share of server CPU sales increase to 34% in the third quarter. However, its gaming segment has struggled, expected to decline by 59% this year.

 
 


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