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AMD stock surges as Microsoft CTO praises chipmaker’s AI offerings.

Shares of AMD rose 5% following the announcement by Microsoft’s chief technology officer, Kevin Scott, that the chipmaker is strengthening its position in artificial intelligence (AI). This development comes as Nvidia currently dominates the AI market, and its shares have almost tripled this year. AMD is looking to compete by offering compelling GPU offerings that could become increasingly important in the coming years. Microsoft and AMD have been long-term partners, with Microsoft already using some AMD GPUs in its Azure cloud service, computers, and Xbox consoles.

Scott’s comments at the Code conference suggested that Microsoft is interested in having more high-powered chips on the market from a broader range of vendors. While AMD has previously collaborated with Microsoft on a custom AI chip, Scott did not confirm if that partnership is ongoing. However, he noted that competition is beneficial for the industry. It remains to be seen how easy it would be for Microsoft to adopt AMD’s GPUs at scale and move away from Nvidia. Meanwhile, Microsoft’s cloud rivals such as Amazon and Google have also developed their own in-house silicon.

Overall, AMD’s shares saw a boost as its efforts in AI gained attention with Microsoft’s endorsement. By expanding its GPU offerings and potentially collaborating with Microsoft on a custom AI chip, AMD aims to challenge Nvidia’s dominance in the AI market. The competition between AMD and Nvidia is expected to intensify, which could lead to further advancements and innovation in the field of AI. Additionally, Microsoft’s interest in diversifying its chip vendors reflects the importance it places on having access to a range of high-performance chips for its various products and services.

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