AMD this week increased its datacenter GPU sales guidance by $500 million to $4 billion as the number of customers interested in its latest Instinct MI300-series processors is increasing. $4 billion sales of GPUs for AI and HPC applications is a lot of money in general, but it is a tiny fraction of what Nvidia will earn on its H100, H200, and B200 products.
"[Instinct] MI300 demand continues to strengthen," said Lisa Su, chief executive of AMD, at the company's earnings call with financial analysts and investors (via SeekingAlpha). "Based on our expanding customer engagements, we netback data center GPU revenue to exceed $4 billion in 2024, up from the $3.5 billion we guided in January."
AMD began to ship its Instinct MI300-series products in Q4 2023 (the first customers reported that they had received the compute GPUs in mid-January 2024). Its sales have surpassed $1 billion, according to AMD, which is in line with the company's expectations that the Instinct MI300-series would be its fastest product to $1 billion revenue. It is highly likely that AMD begain to ship its Instinct MI300 products in very late Q4 2023, so the majority of shipments were made in the first quarter of this year. Such a high adoption rate points to significant interest in the new series and AMD's conservative guidance about Instinct MI300's sales in 2024.
Meanwhile, it should be noted that AMD is not supply constrained with the Instinct MI300 and demand for the product is relatively modest at this point.
"Our $4 billion number is not supply capped, […] we do have supply capability above that," said Su. "It is more back half weighted. So, if you are looking at sort of the near-term, I would say, for example, in the second quarter, we do have more demand than we have supply right now, and we are continuing to work on pulling in some of that supply."
Last week Intel guided that sales of its Gaudi 3 products will achieve $500 million this year, which is not much compared to how much its Xeon processors for datacenters earn. Gaudi 3 has yet to ramp, so it is possible that the processor will not have enough time to sell in huge quantities in 2024.
Expectations for sales of AI processors by AMD and Intel pale when compared to what Nvidia is expected to make in 2024. Analysts believe that the company could sell $40 billion worth of datacenter GPUs.
It is noteworthy that while AMD's datacenter GPU sales look impressive, they are still considerably lower compared to sales of AMD's gaming solutions, comprising of AMD's system-on-chips for Microsoft's Xbox and Sony's PlayStation consoles, the company's discrete Radeon GPUs for desktops and laptops, and not including built-in Radeon graphics. Sales of AMD's gaming products exceeded a billion dollars per quarter for years and only dropped to $922 million this quarter.
