Google Cloud turns to AMD for cloud computing services
AMD (Advanced Micro Devices, Inc.) is a multinational company specializing in the production of semiconductor devices for computer processing. In addition, the company manufactures flash memories, graphics processors, motherboard chipsets and a range of other components for consumer electronics.
Google will use AMD’s latest data center chip to deliver cloud computing services. AMD’s efforts to gain market share from Intel Corp. should accelerate as a result of this action. Google is a major buyer of data center processors. They’re creating services on top of the chips to let millions of consumers rent computing power.
New AMD-based services are being tested by Snap Inc and Twitter Inc. AMD has gained market share over Intel, which has long been the leader in data center processors but whose products are inferior in some respects due to of the manufacturing problems.
AMD is a solid bet on the megatrends of cloud computing and data center expansion. It is a bet on the growing complexity of artificial intelligence and big data analytics. Its GPU chips also give Nvidia a fight for their money. AMD is betting on the next generation of Xbox and Sony PlayStation consoles, as well as the introduction of a new Nintendo Switch later this year. AMD is also emerging as a major competitor for PCs and laptops.
Processor sales are growing faster than the industry as a whole, indicating that AMD is gaining market share over its competitors.
AMD builds its latest Ryzen and EPYC processors with TSMC, giving it access to advanced manufacturing techniques. The latest PlayStation and Xbox game consoles, along with Tesla’s on-board gaming setup, all use AMD processors. AMD’s profits were helped by strong demand for these consoles. In the first quarter, AMD’s sales grew 93%, while its net profit more than quadrupled.
Effect on actions
Shares of Advanced Micro Devices jumped 4% today after the company revealed that Google, a subsidiary of Alphabet, had chosen AMD’s latest data center processor to launch a new service.
AMD has been at the forefront of high-performance compute, graphics and visualization technologies for more than 50 years, providing the foundation for games, immersive platforms and the data center.
AMD’s market share peaked at 20% in 2006, and it was the company’s highest point. Intel was the one taking food from AMD at the time. It will be interesting to see how Intel stocks perform as it will have a direct impact on AMD.