AMD sold $1B of Instinct GPUs last quarter, driving triple-digit datacenter growth

AMD has told investors that its Instinct MI300X GPUs – the chip designer's alternative to Nvidia AI accelerator hardware – landed over $1 billion of datacenter revenues in Q2 this year.

Speaking on AMD's second-quarter earnings call on Tuesday, CEO Lisa Su predicted the accelerators will bring in over $4.5 billion during her biz's 2024 fiscal year – up from the $4 billion target announced in April.

Launched in early December, AMD's MI300-series accelerators are its most powerful to date and – on paper at least – beat Nvidia's H100 in floating-point performance, memory bandwidth, and capacity. The part's performance appears to have made it attractive for AI inferencing on large models.

"Microsoft expanded their use of MI300x accelerators to power GPT-4 Turbo and multiple Copilot services including Microsoft 365, Chat, Word, and Teams," Su revealed.

As it stands, AMD's Instinct GPU sales accounted for more than a third of its $2.8 billion in datacenter revenues during the quarter. Along with a "double digit" increase in sales of its Epyc processors, datacenter revenues rose 115 percent year-over-year (YoY) and accounted for nearly half of the chip shop's entire Q2 revenues, which topped $5.8 billion (up 9 percent) and delivered $265 million of overall net income (up 881 percent).

AMD's client group also grew in the quarter, ended June 29, posting 49 percent YoY growth and a nine percent jump from Q1's results. The House of Zen credited stronger sales of its Ryzen desktop and mobile processors for the improvements.

While AMD's datacenter and PC revenues popped, its overall results were overshadowed slightly by weak demand for embedded and semi-custom gaming components.

In Q2, AMD gaming revenue fell 59 percent from the prior year and 30 percent from Q1. On the call, Su blamed much of the decline on slowing demand for game consoles from Microsoft and Sony – which last released new models nearly four years ago. While she noted that sales of 6000 and 7000-series Radeon graphics cards rose, that wasn't enough to offset semi-custom orders.

Meanwhile, sales of embedded processors, such as AMD's FPGAs and Versal Adaptive SoCs, fell 41 percent YoY to $861 million – though the segment does appear to be recovering, with revenues up two percent from Q1. AMD president Victor Peng, who joined in 2022 when AMD bought FPGA biz Xilinx where he was CEO, is retiring, by the way.

"The first quarter marked the bottom for our embedded segment revenue," Su observed, adding that while revenues were flat quarter over quarter, AMD "saw early signs of order patterns improving and expects embedded revenue to gradually recover in the second half of the year."

The same can't be said of gaming. CFO Jean Hu warned investors to expect "double digit" declines across the segment.

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Looking to the third quarter, Su predicted declines in gaming revenue to be more than offset by continued growth for AMD's datacenter and client products, propelled by ongoing demand for MI300X GPUs and the recently announced Ryzen AI and Ryzen 9000 processors. The latter are due out early next month after a brief delay attributed to unspecified issues.

Su warned that buyers can't expect easy access to AI accelerators like the MI300X and the upcoming MI325X.

"We continue to see line of sight to continue increasing supply as we go through the second half of the year, but I will say that the overall supply chain is tight and will remain tight through 2025," Su told investors.

AMD predicted revenue will grow 15 percent quarter-over-quarter or 16 percent YoY in Q3 – meaning revenue of $6.7 billion plus or minus $300 million.

Those are nice numbers tho well short of Nvidia's recent datacenter surge. The AI hardware leader's most recent results saw it post $26 billion of revenue, $22.6 billion of which came from datacenter products and represented 427 percent YoY growth.

Not all of that will have come from accelerators – Nvidia also sells networks and other datacenter kit that AMD doesn't offer – but Nvidia's datacenter business is on track to post bigger quarterly revenue than all of AMD for a full year.

AMD's stock price is up more than seven percent to $149 in after-hours trading right now. ®