Advanced Micro Devices, Inc. (NASDAQ:AMD) chief Lisa Su shared insight into the prospects of graphics processing units (GPUs) in the near term, almost to the extent of taking a dig at rival Nvidia Corp (NASDAQ:NVDA) and hyperscalers like Amazon.com Inc (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.

As AI models become more standardized, there’s potential to create custom chips that offer greater energy efficiency, smaller sizes, and lower costs.

According to the WSJ report, Su highlighted this opportunity, noting that while GPUs remain the top choice for large language models due to their efficiency in parallel processing, the future will likely see a shift toward a broader range of chip architectures.

Also Read: Nvidia, AMD, and Broadcom Stocks Jump, Fed Rate Cut Boosts AI Chip Sector

Recent reports indicated AMD focusing on the mainstream and mid-range GPUs, ditching the premium gaming GPU market led by Nvidia.

Nvidia GPUs, designed for gaming graphics, have been instrumental in helping the company reach a trillion-dollar valuation and counting.

Tech investor James Anderson expects Nvidia to reach a market cap of $50 trillion within the next decade. JPMorgan analyst Harlan Sur expects AMD’s revenue from data center GPUs to grow by $5 billion in the current fiscal.

Su emphasizes that the future of AI computing will involve a combination of different chip types, including GPUs and new specialized chips.

For context, large cloud providers like Amazon and Google have developed their custom AI chips for internal use.

Rival hyperscalers, including Oracle Corp (NYSE:ORCL) and Amazon, have been collaborating lately, which BofA Securities analyst Justin Post expects to unlock demand for infrastructure and applications, implying higher demand for AI chips.

AMD stock gained over 60% in the last 12 months versus Nvidia’s 175%.

Investors can gain exposure to the semiconductor sector through First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) and Columbia Semiconductor and Technology ETF (NYSE:SEMI).

Price Actions: AMD stock is up 0.28% at $156.39 premarket at the last check Monday.

Photo courtesy of AMD

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This article AMD Chief Predicts Custom Chips Will Outperform GPUs, Sees Shift in AI Chip Demand: Report originally appeared on Benzinga.com

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