Concerns Mount Over AI Chip Valuations

Watch Concerns Mount Over AI Chip Valuations - Bloomberg on Dailymotion

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00:00I restart with you how I did with Peter, right? The market is confronted with AMD's earnings

00:04and trying to work out, is this them gaining some territory on NVIDIA in the accelerator

00:10card market? Or are they getting a boost, particularly in the quarter gone from those

00:14legacy business lines, PC processors, CPU for server? Let's just start there. What did you

00:20learn from AMD? Yeah, good morning, Ed. We're seeing all of that from AMD. And let's start

00:27with the old boring part of AMD, right? The PC CPUs, the standard server CPUs, where they're

00:33clearly continuing to gain share versus Intel. And that's a good cash generator for the company.

00:40So we shouldn't dismiss that acceleration that we saw there, that success that they're

00:44continuing to deliver in terms of share gains. Obviously, a lot of investors are still focused

00:49pretty much on the AI opportunity. And what's interesting there is that they've just gotten

00:54started. They've only now developed solutions for those accelerators that meet the quality

01:02for inference, for example, potentially for training that NVIDIA has. In the past, when

01:07we've seen AMD leapfrog Intel back in the old days, they gained an enormous amount of share.

01:12We saw that again this time around. Now they have a new opportunity to gain share in the AI

01:16accelerator. We're not seeing them gain share except for just a little bit as they get started

01:21today. But I think that's something we can look forward to. Bloomberg's Ian King, who

01:26you know, made a really simple point yesterday on the program ahead of AMD earnings. The data

01:31center category is just north of $4 billion a quarter business. NVIDIA's data center category

01:37is $40 billion or north of $40 billion each quarter. In aggregate, do you see all those ships

01:47rising right now with the tide that is AI and infrastructure investment?

01:52It still is, Ed. We're still seeing the pie expand or the tide rise, whatever analogy you want.

01:58But what AMD has that NVIDIA doesn't have is an opportunity to take a greater share of that pie

02:05as it grows. And so, you know, I expect we're going to see both companies continue to grow very

02:10strongly over time. We own both of those for clients. I own both of them personally.

02:14Because I think this is an opportunity in AI that is just beginning. I think we have many years ahead.

02:20And what we're seeing also in those results from AMD and elsewhere is that enterprises,

02:27sovereigns are looking to deploy AI. And that's what's helping to continue to grow that pie.