AMD is laying off 4 percent of its global workforce, or about 1,000 employees, to prioritize AI chip development as it seeks to compete with Nvidia in this high-demand market.
AMD’s data center segment saw revenue more than double in the recent quarter, driven by the demand for AI chips used in data centers for generative AI technologies like ChatGPT.
AMD’s restructuring is part of a strategic realignment, directing resources to its highest growth areas, especially AI and data center solutions, which are projected to grow significantly in 2024, Reuters news report said.
AMD plans to start mass production of its new MI325X AI chip by the end of the year. This development reflects investment in AI chips, which command premium prices and are in high demand, particularly from major cloud service providers like Microsoft.
The shift towards AI chips has increased AMD’s R&D costs by nearly 9 percent and its total cost of sales by 11 percent in the third quarter, driven by the costly process of scaling up production amid capacity constraints.
