The president and CEO of the Federal Reserve Bank of Minneapolis, Neel Kashkari, has expressed concern about consumer risk due to “fraud, hype, and confusion” surrounding bitcoin. Moreover, he said the cryptocurrency has been around for more than a decade but “there’s still no legitimate use case in an advanced democracy.” ‘I Am Worried From […]
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Consensys has told the U.S. Securities and Exchange Commission that Ethereum’s proof of stake implementation “meets and even exceeds the security of Bitcoin’s Proof of Work (PoW).” The blockchain software company said the commission should recognize the advanced safeguards inherent in Ethereum’s design which exceed the “security and resilience safeguards underlying bitcoin-based exchange-traded products.” The […]
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Shares of semiconductor company Advanced Micro Devices (AMD 8.31%) were up 8.2% as of 10:45 a.m. ET Tuesday — and it’s no great secret why.
On Tuesday morning, not one, not two, but three analysts raised their price targets on AMD stock, citing decent performance in graphics processing units and a big boost to business as the artificial intelligence (AI) trend enters its “second wave.”
AMD’s biggest vote of confidence came from analysts at British bank Barclays, who nearly doubled their share price target on the semiconductor stock from $120 to $200. Barclays named AMD as a beneficiary of this second wave of AI interest as more customers jump on the bandwagon and begin looking for more suppliers of AI chips.
In AMD’s case, that mainly refers to its MI300X line of accelerator chips. Analysts at KeyBank were just behind Barclays in their enthusiasm for AI, setting a $195 price target and predicting we’ll see a “meaningful inflection in demand” for AMD’s new AI chip this year, according to TheFly.com. And as MI300 sales ramp up, KeyBank forecasts $8 billion in GPU sales for AMD this year.
Rounding out the list, Susquehanna Research reports that GPUs are selling “around MSRP,” which suggests at least decent demand for GPUs used to facilitate AI functions.
Not all the news is great. In its report, Susquehanna injected notes of caution regarding weaker segments of the semiconductor universe. Buyers of automotive and industrial semiconductor chips are still flooded with inventory, it seems, and are engaged in a period of “destocking” as they work through their inventories. That won’t be great for pricing. Demand for PC chips is still “bouncing along the bottom,” too, it asserts. Cellphone chip demand seems more or less flat, with weakness evident in China — primarily affecting Apple‘s suppliers.
All this notwithstanding, it’s the AI story that is resonating with investors on Tuesday. If AMD books $8 billion in GPU sales this year as KeyBank predicts, that would be a huge boost to its business, which booked barely $22 billion in revenues over the last 12 months across all of its product lines. While AMD stock looks admittedly pricey at more than 1,100 times trailing earnings right now, a big boom in AI chip demand, undergirded by strong pricing in these chips, has analysts forecasting AMD will earn enough this year to drive its price-to-earnings ratio down to just 39.
AMD investors are betting that price will look cheap a year from now — and are buying the rumor in hopes of profiting from the news.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Apple. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
Shares of Advanced Micro Devices (AMD 9.89%) climbed 9.9% on Thursday after the chipmaker launched a line of new large accelerated processing units (APUs) designed to handle AI workloads that could rival similar offerings from Nvidia (NVDA 2.40%).
At the company’s “Advancing AI” event yesterday, Advanced Micro’s CEO Lisa Su introduced the previously announced Instinct MI300X APUs, which are designed for artificial-intelligence (AI)-oriented servers. They combine the power of the company’s graphics processing units (GPUs) and central processing units (CPUs). Su added that both Microsoft and Meta have already committed to using the chip.
Nvidia currently dominates the industry, with an estimated 80% market share in AI chips.
Su admitted as much in her presentation yesterday, but also noted that AMD believes it “could get a nice piece” of what should be a more than $400 billion market opportunity in AI chips by 2027 — twice as large as the company had previously forecasted. With a market that large, AMD doesn’t necessarily need to beat Nvidia, as there should be room for multiple chip stocks to win as the space grows.
In a note to clients early Thursday morning, analysts at Citi estimated AMD could command around 10% of the total AI chip market after it starts shipping its new AI-centric products, starting in 2024.
For perspective, consensus estimates on Wall Street currently predict AMD’s revenue will decline a modest 4% in 2023 to under $23 billion. By comparison, Nvidia’s revenue this fiscal year is expected to more than double, to nearly $59 billion.
Commanding even a 10% piece of the fast-growing AI chip market represents a massive opportunity for AMD to reaccelerate its growth. The stock is responding in kind today.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Steve Symington has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Investors should get used to extreme competition in the artificial intelligence (AI) arena. According to analysts at Bank of America, artificial intelligence will add $15.7 trillion to the global economy by the end of this decade from both increased revenue opportunities and lower costs. That means AI capabilities will be table stakes for any company hoping to succeed.
Two chipmakers leading the charge are Nvidia (NVDA -0.05%), which has first-mover advantage, and Advanced Micro Devices (AMD 0.17%), the scrappy challenger that more recently came out with its MI300 Instinct AI accelerators.
This week, both companies made announcements for their latest parlays in the ongoing quest for AI supremacy. But of the two, one company appears to have the clear advantage.
On Tuesday, AMD announced it was acquiring open-source AI software start-up Nodi.ai for an undisclosed sum.
Nodi.ai was initially founded in 2013 as an AI hardware company, aiming to give gamers the ability to control game elements using only their fingers instead of a controller. However, the company has since pivoted to open-source AI software, which can also run on AMD’s chips.
In the press release, Nodi.ai CEO Anush Elangovan said: “Our journey as a company has cemented our role as the primary maintainer and major contributor to some of the world’s most important AI repositories. By joining forces with AMD, we will bring this expertise to a broader range of customers on a global scale.”
And AMD Senior Vice President Vamsi Boppana added:
The acquisition of Nod.ai is expected to significantly enhance our ability to provide AI customers with open software that allows them to easily deploy highly performant AI models tuned for AMD hardware. The addition of the talented Nod.ai team accelerates our ability to advance open-source compiler technology and enable portable, high-performance AI solutions across the AMD product portfolio. Nod.ai’s technologies are already widely deployed in the cloud, at the edge and across a broad range of end-point devices today.
The acquisition follows AMD’s acquisition of French AI software start-up Mipsology back in August. Mipsology is another AI software stack specializing in photo and video recognition and geared for applications such as autonomous driving and smart manufacturing robotics.
AMD is not only aggressively investing in its own ROCm AI software stack with internal investment but also making these bolt-on acquisitions in the space to add new capabilities. According to TechCrunch, AMD now has 1,500 engineers in its recently formed AI group and will add 300 before the end of this year. It appears Nodi.ai and Mipsology will become part of this group.
But while this week’s news could be seen as a positive for AMD, the fact that it’s still having to cobble together capabilities via acquisitions indicates it’s still well behind Nvidia and spending hard to catch up.
Image source: Getty Images.
Nvidia started its own closed-source CUDA software stack all the way back in 2006 and continues to innovate in AI at a fast pace from a leadership position. An example came on Wednesday, when the company introduced a new AI inferencing capability called Nvidia NeMo SteerLM.
The new software tool allows developers to greatly streamline model building for inference. After training a large language model (LLM), an inference model dictates how an AI specifically reacts to a stimulus.
LLMs are massive and contain a ton of information. In order for developers to apply them to actual specific use cases, they need to give the LLMs “directions” when prompted. While more and more developers have done this, the process is time- and labor-consuming.
SteerLM greatly streamlines the process, allowing developers to tune an inference model with just a basic set of prompts. Those prompts are then run and produce a data set. And that dataset can then be used as a baseline input for an AI model that can be easily adapted on the fly.
If that sounds complicated, Nvidia gave some examples of how this may be applied. One example is an enterprise customer service chatbot that can alter its parameters on the fly, given a customer’s age, geography, and even softer characteristics such as changing attitudes.
Another example is for a law firm or enterprise to output answers from an LLM in either formal legal text or a more accessible conversational style, depending on the audience. And game developers can have characters in games react organically to a player’s actions or circumstances, rather than the traditional, mechanical pre-ordained list of actions or speeches pre-programmed by a developer.
Most companies and cloud providers would love more competition in the AI space and will no doubt support AMD’s efforts to catch up here. However, this week’s news flow seems to show that AMD is still making foundational moves to boost its capabilities, while Nvidia seems to be moving forward with rapid organic innovation from its in-house teams while making artificial intelligence closer and closer to human interaction.
While AMD will no doubt get some piece of the AI pie, it doesn’t seem like it will catch up to Nvidia anytime soon.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Billy Duberstein has positions in Bank of America. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, and Nvidia. The Motley Fool has a disclosure policy.
Apart from setting the bar with the first-of-its-kind solution, Telescope Labs boasts the plugin’s integration with artificial intelligence for advanced real-time analysis.
Launched in 2022, data analytics startup Telescope Labs has launched an advanced tool for analyzing and grading web3 games. The company provides support for web3 gaming outfits and uses predictive models and machine learning to cater to users. According to an official announcement on July 4th, the newly-unveiled plugin is powered by OpenAI’s GPT-4. The tool is a unique solution that utilizes AI to access thousands of web3 games.
Telescope Labs deploying the advanced reasoning abilities of GPT-4 means that the new tool for analyzing and grading web3 grams goes beyond the traditional analysis tools. It will help its users conduct daily analyses and compare the growth performance of multiple games. In addition, the Telescope Labs web3 game analytics powered by GPT-4 can be used to predict future trends.
Following the launch, users of the Telescope Labs tool can use it for grading and analyzing over 2,000 web3 games. Also, there are 37 distinct Key Performance Indicators (KPIs) available to them to make smarter choices. The KPIs have been optimized for web3 and are accessible to all users.
The CEO and co-founder of Telescope Labs, Semih Gilan, is excited about the announcement of the grading tool. He added that “the plugin’s blend of voluminous and varied data, sophisticated reasoning, user-friendliness, and real-time responsiveness is a game-changer for web3 gaming and blockchain.”
Notably, the plugin is the first-of-its-kind solution, and this means that Telescope Labs has set a standard for future developments. Already, OpenAI disrupted the markets with its ChatGPT before releasing GPT-4 months ago. Since its release on March 14th, 2023, the latest version of OpenAI’s multimodal larger language model has caught the attention of many companies like Telescope Labs. With Telescope Labs launching a GPT-4-backed web3 games grading tool, there will be a higher understanding of web3 gaming and blockchain game analysis.
Telescope Labs spoke about the push behind the development of the grading tool. The data analytics startup said the plugin is responding to the blockchain gaming industry’s call for advanced analysis tools. It added that blockchain gaming community members have been demanding user-friendly data analysis tools. Hence, the unveiling of the plugin.
Apart from setting the bar with the first-of-its-kind solution, Telescope Labs boasts the plugin’s integration with artificial intelligence for advanced real-time analysis. It also said the tool is easy to use and sets the benchmark regarding data access.
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Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
Sure, artificial intelligence (AI) stocks have seen a boom in their stock prices, but unlike many past bubbles, the hype around AI seems to be the real deal — at least for the most part. Bubbles tend to form when stock prices go up a lot without a requisite jump in revenue and profits, but Nvidia‘s (NVDA 0.15%) blowout guidance given in May 24 shows the AI trend is translating into real revenue and profits for well-positioned companies.
Of course, where there’s strong profits, competition will follow. That’s why June 13 will be a pivotal day for Advanced Micro Devices (AMD 2.54%), which is looking to challenge Nvidia’s AI dominance. Yet no matter who wins this race, a third tech company apart from these two is bound to benefit either way.
June 13 is the day when AMD will hold its AI Technology and Data Center presentation, in which it will unveil its AI platform and strategy. Many think it’s likely AMD will reveal details of its new MI300 accelerated processing unit (APU), which will take on Nvidia’s H100 systems in AI servers.
While the event is Tuesday, some specs have already been rumored to the tech press. Tech website Tom’s Hardware derived information on the MI300 from a presentation on the Department of Energy’s El Capitan Supercomputer, which will use the MI300, and a recent presentation from AMD Chief Technology Officer Mark Papermaster. According to Tom’s, the MI300 will feature 13 “chiplets,” with some stacked vertically in a 3D structure, combining the company’s Zen 4 EPYC CPUs, CDNA 3 GPUs, and eight stacks of high-bandwidth memory (HMB). Overall, the chip system contains 146 billion transistors.
By comparison, the Nvidia H100 contains 80 billion transistors, but remember, that is only for the single GPU. The MI300 will probably be up against Nvidia’s own Grace-Hopper superchip this summer and beyond, which incorporates not only Nvidia GPUs but also its new Grace CPU tailor-made for AI processing.
Image source: Getty Images.
Prospective customers will no doubt be very eager to hear more details around speed, latency, and capacity of the MI300. According to a Digitimes article on June 8, data center customers are clamoring for an alternative to Nvidia, which currently dominates the AI GPU market and can therefore charge exorbitant prices.
With the advent of OpenAI’s ChatGPT last November, the capabilities of AI seemed to break new ground, setting up an arms race among leading companies across a host of industries for these new AI capabilities.
According to Trendforce, the AI server market should see strong 38.4% growth this year, despite a projected decline in the overall server market. Over the medium term, Trendforce sees AI server shipments growing at a 22% average growth rate between 2022 and 2026, going from 9% of overall server shipments this year to 15% of shipments by the end of that time period. Yet given the high prices of Nvidia H100-based servers today, the percentage of AI server revenue is probably much higher than the mere shipment numbers.
Currently, Nvidia dominates this high-profit, high-growth portion of the market, with between 60% and 70% market share in AI servers. Another 20% comes from custom application-specific integrated chips (ASICs) designed by the cloud server providers themselves, such as Amazon‘s Inferentia and Trainium chips or Alphabet‘s tensor processing units (TPUs).
Data-center operators would love to see a viable third-party competitor to Nvidia, which could help drive down the pricing for these now need-to-have AI chips. So if AMD can come through, it would be a huge plus for AMD and a challenge for Nvidia. Although even an oligopolistic industry with two or three or players would probably yield good profitability for each.
Some analysts are catching on; last month, Morgan Stanley analyst Joseph Moore adjusted his AI revenue outlook for AMD, saying that it could be “multiples” higher than first believed.
No matter how much of an inroad AMD’s MI300 makes against Nvidia’s H100, foundry Taiwan Semiconductor Manufacturing (TSM 4.33%) makes both chips on its most advanced 5nm process. So for defensive investors, Taiwan Semiconductor may still be the better way to play the trend, as it currently makes the overwhelming majority of leading-edge chips. Recently, TSMC announced it would be raising its prices to customers between 3% and 6% next year for its advanced wafers, and it’s likely to run into little resistance.
No wonder Taiwan Semiconductor caught Warren Buffett’s eye last year. Although Buffett wound up selling out of his position because of Taiwan Semi’s proximity to China, assuming you’re OK with this geopolitical risk and are sufficiently diversified, TSMC may be a good way to benefit from this burgeoning AI chip war as well.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Billy Duberstein has positions in Alphabet, Amazon.com, and Taiwan Semiconductor Manufacturing. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon.com, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.