AMD’s flagship AI GPUs, the Instincts, are sold at a significant discount to Microsoft, offering a competitive alternative to Nvidia’s more expensive H100. According to Tom’s hardwareNvidia’s H100 AI GPUs cost up to four times more than AMD’s competing MI300X, with prices topping $40,000.
Despite the price advantage, AMD’s market strategy is not expected to have a significant impact on Nvidia’s strong position in the AI GPU market. This is thanks to Nvidia’s established CUDA software stack, which is optimized for a wide range of AI applications and workloads, resulting in overwhelming demand for its GPUs.
AMD recently raised its expectations for artificial intelligence revenue from $2 billion to $3.5 billion this year. However, Citi analyst Christopher Danely believes that AMD could be purposefully understating its sales figures. He predicts AMD will generate $5 billion this year and $8 billion next year from the MI300.
Big discount
Microsoft and Meta are reportedly the biggest customers for the MI300, which was unveiled in December. The average retail price for Microsoft is about $10,000, while other customers pay $15,000 or more.
Despite AMD’s aggressive pricing strategy, risks remain. The expansion of the PC space may be over and Intel is catching up to Taiwan Semiconductor (TSM) in manufacturing.
In addition, AMD’s sales figures could be affected by the fact that Nvidia does not officially announce the prices of its H100 80GB products, which depend on several factors such as the volume of the batch and the total volumes purchased by a given customer .
While AMD’s Instincts are vastly cheaper than Nvidia’s H100, the impact on Nvidia’s dominant market position remains to be seen. With AMD’s sales of data center GPUs expected to exceed $3.5 billion and supply still available, this is a stark comparison to Nvidia’s rumored 52-week wait times. However, given Nvidia’s established software infrastructure and high demand, AMD’s price advantage may not be enough to significantly disrupt the market.