Advanced Micro Devices, Inc. (NASDAQ:AMD) shares popped 5% on Thursday and are expected to surge more when markets open today, in response to flattering comments made by Microsoft Corporation (NASDAQ:MSFT) on the Nvidia Corporation competitor’s artificial intelligence (AI) prospects.
Like Nvidia, AMD’s graphics processing units are well optimised to handle generative AI and large-scale model training, but the Santa Clara, California-based semiconductor company has lagged behind its Silicon Valley rival in copping an AI premium.
Nvidia won an early-mover advantage when OpenAI chose its microchips to train landmark LLM ChatGPT, sending shares soaring over 200% and making Nvidia the newest trillion-dollar corporation in 2023.
But Microsoft’s chief technology officer Kevin Scott contended that AMD is far from obsolete in the AI-generated future.
“They’re making increasingly compelling GPU offerings that I think are going to become more and more important to the marketplace in the coming years,” Scott told the Code Conference in Dana Point, California, this week.
Microsoft is historically closer to AMD than Nvidia, having always used AMD chips to power its Xbox gaming consoles.
In May, it was reported that Microsoft was working with AMD to advance AMD’s AI prowess as a means of creating an alternative to Nvidia’s dominant position.
At the time of writing, AMD shares were swapping for $102.76 with a market capitalisation of $166 billion against Nvidia’s $1.06 trillion market cap.
Though AMD’s partnership with Microsoft is a great leg up, Nvidia remains the premier AI play on the stock market, even if famed tech investor Cathie Wood reckons otherwise.