Technology news and discussion on TalkFuse.
AMD’s datacenter business is booming while gaming takes a backseat
AMD's latest quarterly earnings show a stark divide between its booming data centre business and a struggling gaming division, underlining how demand for AI computing power is reshaping the chipmaker's revenue mix. Data centre sales more than doubled year-on-year to $6.7 billion (£5.3 billion), while gaming revenue slumped as price rises and component shortages hit console and handheld sales.
Data centre revenue climbed from $3.2 billion a year earlier, a 107% increase, and rose from $5.8 billion in the previous quarter, driven largely by AI capacity demand. Gaming revenue fell 31% year-on-year to $779 million, hurt by weaker sales of the Xbox Series X/S, PS5 and Steam Deck. Overall, AMD posted record quarterly revenue of $11.5 billion, up 50% year-on-year, with data centre now accounting for 58% of the company's total revenue; its client business, boosted by Ryzen processor sales, grew 23%.
In short
- AMD's data centre revenue more than doubled to $6.7 billion on AI demand
- Gaming revenue fell 31% amid price hikes and shortages
- Overall quarterly revenue hit a record $11.5 billion, up 50%
Explained simply
AMD is a US chipmaker whose processors are used in computers, games consoles and data centres. Data centres are large facilities that run online services and process information; their computing chips are increasingly used to develop and operate artificial intelligence systems.
AMD sells data-centre products as well as chips for personal computers and gaming devices. Its rivals include Nvidia in AI computing and Intel in computer processors, while console makers such as Microsoft and Sony use AMD chips in some of their machines.
The shift towards AI has increased demand for powerful data-centre computing, while gaming device sales can be affected by prices and the availability of parts. The changing balance matters to AMD because different product areas contribute differently to its business and future growth.
AI Business Companies Entertainment Gaming Technology