AMD stocks rise as Microsoft teams up on A.I. chip push

Lisa Su AMD CEO (Image credit : AMD) Following a media report that the chipmaker was collaborating with Microsoft on a new artificial intelligence processor, AMD shares increased as much as 12% on Thursday. At the close of the day's trading, AMD stock was up 6%. Amazon and Alphabet, two of Microsoft's main rivals in the market for cloud infrastructure, each have specialized CPUs that programmers can use to train models. However, Microsoft has not yet made a dedicated AI chip available. The one being developed in collaboration with AMD goes by the code name Athena, and according to Bloomberg, it will be able to train models and draw conclusions from new data. According to Bloomberg, which cited unidentified sources, Microsoft is assisting AMD in funding the project. [caption id="attachment_169218" align="aligncenter" width="1200"] Image credit : ThoughtCo[/caption] Shares of Nvidia decreased after the report. Microsoft uses Nvidia graphics processing units, just like other major IT firms, to power its AI models. Microsoft and AMD both declined to respond to the report. In the past six months, the demand for AI-capable silicon has increased more than ever, especially at Microsoft, which supplies the computational power for startup OpenAI's popular ChatGPT chatbot. According to Microsoft, the technology required thousands of Nvidia GPUs. Also read : Microsoft is creating its own AI chip ‘Athena’ : Report However, Microsoft also needs chips in order to run its own programs that use the GPT-4 large language model, which is the foundation of ChatGPT. Large language models are a subset of generative AI systems that can produce text-based content in response to user input. The GPT-4 model is used by Microsoft's Bing chatbot, and the software company has revealed that it will also be used by security and productivity apps. Microsoft, as well as other cloud providers like Google and Oracle, already use AMD chips.