It’s no surprise that AI chips are still the hottest tech in town. Wall Street has been all aboard the hype train for the better part of the last 18 months. Wherever investors see the potential AI profit, they’re throwing money at it. 

Nvidia, once a relatively niche computer chip maker, has been the biggest beneficiary of that spending spree. Over the past five years, its stock has risen some 3,000%, achieving a $3 trillion valuation. That puts it in the same class with Apple and Microsoft. 

And just when you thought Nvidia had the whole AI chip game on lockdown, Advanced Micro Devices (AMD) hops into the ring like Jake Paul facing Mike Tyson (can’t wait to watch this by the way). On Thursday, they rolled out their latest Instinct MI325X chip, and trust me, this is not just some boring tech release—it’s a full-on challenge to Nvidia’s dominance.  

AMD’s new Instinct MI325X chip is gunning directly for Nvidia’s Blackwell chips, which are expected to drop early next year. Think of it as AMD trying to take a slice of Nvidia’s massive AI pie. And why wouldn’t they? Nvidia’s been making serious bank, selling its chips to big names like Meta, Microsoft, and OpenAI, all of whom are racing to build bigger and better AI models.

AMD, led by their fearless CEO Lisa Su, isn’t playing around. Su is basically telling Nvidia, “You’ve had a good run, but it’s our turn now.” If AMD’s new chip can get into the hands of these big tech players, it could put some major pressure on Nvidia’s pricing (and maybe, just maybe, knock them off their AI chip throne). Remember, Nvidia controls between 70% and 95% of the AI chip market and their stock is up a ridiculous 175% this year. Meanwhile, AMD is up a respectable but modest 20%. Now, with AI projected to hit $400 billion annually by 2030, AMD wants in on that action.

Su and her team are betting big on the Instinct MI325X to help claw away some of Nvidia’s market share. They claim their MI325X can deliver 40% more performance than Nvidia’s H200 on Meta’s Llama AI model. That’s a serious flex.

If it works, they could force Nvidia to rethink its sky-high margins (seriously, 75% margins… that’s wild). 

Here’s where AMD has a bit of an uphill battle. Nvidia has something called CUDA, a programming language that AI developers are basically glued to. It’s like the Apple ecosystem (once you’re in, it’s hard to leave). This gives Nvidia a huge edge since most developers are already locked into its software. AMD knows this and has been hustling to improve its own software platform, ROCm, to make switching easier for developers.

The big question is whether developers and cloud giants are willing to make the switch. If AMD can prove its chips are just as good (or better) than Nvidia’s, we could be looking at a serious shake-up in the AI chip world. 

But AMD’s stock didn’t exactly pop after the big announcement. Instead, it sank 4%. Looks like investors are playing the “show me, don’t tell me” game.

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Stock.News has positions in Nvidia, AMD, Meta, Microsoft, and Apple as mentioned in the article.