Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: AMD has signed a definitive agreement with open ai to
Speaker 2: deploy six gigawatts of AMD GPUs. AMD says it will
Speaker 2: equate to tens of billions of dollars in revenue. Open
Speaker 2: Ai will get up to one hundred and sixty million
Speaker 2: am D shares in tranches and set against both operational
Speaker 2: and financial milestones, the focus is inference. Let's bring in
Speaker 2: AMD CO Lisa Sou and Open Ai president Greg Brockman.
Speaker 2: Both of them join us on set here at Bloomberg
Speaker 2: Tech in San Francisco. Good morning, Good morning, It's great
Speaker 2: to see you here. Let's frame the opportunity. Lisa, you
Speaker 2: know that the market reaction is very clear, But for
Speaker 2: AMD and the AI industry at large, what do you
Speaker 2: think this represents.
Speaker 3: Well, look, this is a huge milestone for AMD. You know,
Speaker 3: we are so thrilled with the partnership with the open
Speaker 3: Ai team, and it's also you know, a huge moment
Speaker 3: for the AI industry because you know, when you get
Speaker 3: to the breakdown to it, you need more AI compute.
Speaker 3: I mean, that's where we are today. Compute is a
Speaker 3: foundation for all of the intelligence we can get from
Speaker 3: AI and you know, we are a compute provider. We
Speaker 3: have spent years on our roadmap. We've spent years working
Speaker 3: with open Ai and the team and you know, together
Speaker 3: now we're embarking on you know, a massive build out
Speaker 3: of six gigawatts of AI compute, and it's it's a
Speaker 3: big deal for us, for our shareholders, for our teams,
Speaker 3: and for really you know, the partnership and the overall
Speaker 3: AI ecosystem.
Speaker 2: Greg I say that the top the focus is inference.
Speaker 2: I think that's really important to be specific about what
Speaker 2: you will do with this capacity. So so literally explain
Speaker 2: that part. And I'm conscious that you know, in the
Speaker 2: first instance, the first target is one gigawatt and then
Speaker 2: eventually six gigawatts. But what will you use it for?
Speaker 4: Well, I think that the world continues to underestimate the
Speaker 4: amount of demand for AI compute, right that just we've
Speaker 4: seen this explosion of demand with things like chat GBT.
Speaker 4: You know, we're at eight hundred million weekly active users.
Speaker 4: Now this probably didn't even exist three years go, and
Speaker 4: we're in a position where we cannot launch futures. We
Speaker 4: cannot launch new products simply because of lack of computational
Speaker 4: power and we see these models continuing to get exponentially better,
Speaker 4: and I think we're just heading to a world where
Speaker 4: so much of the economy is going to be lifted
Speaker 4: up and driven by progress and AI. And so we're
Speaker 4: very much heading to a world by default that I
Speaker 4: think looks like a compute desert, right that there's just
Speaker 4: not enough compute to go around, and so we're trying
Speaker 4: to build as much as possible, as quickly as possible.
Speaker 4: So we're starting with one gigawatt simply because you've got
Speaker 4: to start somewhere, But honestly, we're building as fast as
Speaker 4: we possibly can and trying to bring as much computational
Speaker 4: power to bear for the economy and for the world.
Speaker 1: Lisa, this is such a big commitment to Instinct in
Speaker 1: particular as a customer. Does it make open AI the
Speaker 1: largest for that particular product.
Speaker 3: Well, this is certainly the largest deployment that we have
Speaker 3: announced by far. I mean, you know, six gigawatts of compute.
Speaker 3: As Greg said, we're going to start with the first
Speaker 3: gigawatt in the second half of twenty twenty six on
Speaker 3: our new next generation four fifty chip. I think the
Speaker 3: thing to understand is, you know, these types of partnerships
Speaker 3: actually take you know, years to really get comfortable with
Speaker 3: the idea that we're going to you know, go all
Speaker 3: in together. And this isn't all in partnership in terms
Speaker 3: of building out you know, the AI compute that open
Speaker 3: ai needs for everything that they're offering to the world. So, yes,
Speaker 3: it's a huge deal, and it also says a lot
Speaker 3: about you know, how much needs to come together for
Speaker 3: you know, this entire ecosystem to operate. So you know,
Speaker 3: we are setting up you know, certainly there's a lot
Speaker 3: of engineering work, but our teams are working together on hardware, software,
Speaker 3: We're ensuring the supply chain, all of those elements are
Speaker 3: set up and ready to deliver on this massive commitment.
Speaker 1: Greg, talk us through a little bit about the players
Speaker 1: that you need to also lean on. This has been
Speaker 1: years in the making, as you say.
Speaker 4: With a m D.
Speaker 1: But what other cloud providers were involved? How you thinking
Speaker 1: about this working with an Oracle or others out there.
Speaker 4: Yeah, we really think of this as an industry wide effort,
Speaker 4: and in general, we think that compute is something that
Speaker 4: does require the entire supply chain to really wake up
Speaker 4: and to really to start building much more than people
Speaker 4: we're planning on. I think this starts from energy to
Speaker 4: try to get far more power to be built. Things
Speaker 4: like nuclear I think are going to be very important
Speaker 4: to come online. The cloud providers are an important part
Speaker 4: of this as well. So we're going to be deploying
Speaker 4: AMD in our own data centers. We'll be deploying them
Speaker 4: together with cloud providers. You know, we have a deal
Speaker 4: with Oracle, lots of other cloud providers out there. You
Speaker 4: can really see that we're very much in the We
Speaker 4: just want compute as much compute as possible. We think
Speaker 4: this is important for the economy, we think this is
Speaker 4: important for the nation, we think this is important for humanity.
Speaker 4: And so really we're working with everyone in this whole
Speaker 4: industry in order to get as much compute power online
Speaker 4: as quickly as we can.
Speaker 2: Lisa, I'm sorry specifics where is this data center going
Speaker 2: to be? Is it one single site? Is it Oracle
Speaker 2: that we'll partner with you on this?
Speaker 3: Well, actually, what this really is is an announcement of
Speaker 3: what you know, AMD and open a are going to
Speaker 3: do together. You know, open a I has a lot
Speaker 3: of partners in terms of you know, where they deploy
Speaker 3: I imagine a lot of it will be in cloud
Speaker 3: service providers. It's really up to you know, open Ai
Speaker 3: and Greg and Sam and the team. But the way
Speaker 3: to think about it is, for this amount of compute,
Speaker 3: it's going to have to be in a lot of
Speaker 3: different places.
Speaker 2: It's a massive amount, multiple locations.
Speaker 3: Multiple locations, I would imagine, you know, multiple providers to
Speaker 3: really get this online as fast as possible.
Speaker 2: Greg, there is a lot of focus on where open
Speaker 2: ai is going to get the money from to fund
Speaker 2: all of this. Sam Altman's big picture commitment is well documented, right,
Speaker 2: and the numbers to his mind are in the trillions.
Speaker 2: But have you specifically thought about debt financing for this
Speaker 2: relationship with a MD? Have you thought about doing a
Speaker 2: specific equity raise? You are very committed across multiple projects.
Speaker 3: Yeah.
Speaker 4: Look, the way that I would the way that I
Speaker 4: would look at this is that AI revenue is growing
Speaker 4: faster than I think almost any product in history, and
Speaker 4: that ultimately, at the end of the day, the reason
Speaker 4: this compute power is so important and is so worthwhile
Speaker 4: for everyone to build is because the revenue ultimately will
Speaker 4: be there. Now as a company that is trying to
Speaker 4: move as fast as we can, we look at everything right,
Speaker 4: we look at equity debt, we look at trying to
Speaker 4: find creative ways of financing all of this. That's been
Speaker 4: actually a huge focus of us for the past couple
Speaker 4: of years as thinking about how can we possibly build
Speaker 4: the amount of compute that is required in order to
Speaker 4: really transform this whole economy into an aipowered economy. And
Speaker 4: so I think you'll see lots of creative ideas, but fundamentally,
Speaker 4: I think at the end of the day, it is
Speaker 4: because we believe.
Speaker 2: Sorry to jump in an interrupt and carriage, just forgive
Speaker 2: me on this one. The condition of AMD issuing the
Speaker 2: stock to open Ai requires you to spend money basically
Speaker 2: because you have to deliver that gig awad of capacity first. Lisa,
Speaker 2: I have to ask you if you have assurances that
Speaker 2: open Ai is good for it.
Speaker 3: Well, let me be clear. I mean, this deal is
Speaker 3: a win for am D, it's a win for open Ai,
Speaker 3: and it's a win for our shareholders. And that's kind
Speaker 3: of the way we put this together. I have full
Speaker 3: confidence in you know, open Ai, Sam, Greg Sarah. I mean,
Speaker 3: this is a massive opportunity for us right now. Right here,
Speaker 3: it's about who has the most compute and how fast
Speaker 3: can we get it online? And we're committing to doing
Speaker 3: this together. And the fact is as open ai buys chips,
Speaker 3: that's great for AMD. Our revenue goes up, our earnings
Speaker 3: go up. You know, we expect that it will also
Speaker 3: be very very accretive to our shareholders from day one.
Speaker 3: And as we do that, you know, we're very happy
Speaker 3: to have open Ai as a deep partner and we
Speaker 3: win together. So it's like a virtuous positive cycle in
Speaker 3: how we build out. You know, this big vision for
Speaker 3: having all this compute out there, and yet we.
Speaker 1: Still question as you were just talking about greg some
Speaker 1: of the other supply chain elements. You're talking about the
Speaker 1: need for nuclear for power. What's really interesting is we
Speaker 1: are you feeling confident enough about the rest of the compute,
Speaker 1: the supply chain is there? Is this going to be
Speaker 1: US manufactured? From your perspective, were you looking and also
Speaker 1: building out internationally with MD.
Speaker 4: Yeah, we've been looking at really all options our preference
Speaker 4: and really the core thing that we try to do
Speaker 4: is build as much as possible in the US. And
Speaker 4: you can see the commitments that we've made over the
Speaker 4: past year, you know, five hundred billion dollars of investment
Speaker 4: in the US, and that's not stopping. We're continuing to build.
Speaker 4: I do think that international that there it is also
Speaker 4: going to be important for the world to have compute.
Speaker 4: I think that computer is going to become this like
Speaker 4: national security strategic resource, and every country is going to
Speaker 4: need computational power, and so that we are really not
Speaker 4: limiting our sort of sites in terms of where to build.
Speaker 4: But we do think it is important that the US
Speaker 4: leads in this technology, leads in computational power, and we're
Speaker 4: expanding the supply chain. But you can see that we've
Speaker 4: really been working with partners across the globe in order
Speaker 4: to actually meet the demand that we expect to becoming
Speaker 4: in upcoming years.
Speaker 1: Lisa, the manufacturing of these chips, will you look to
Speaker 1: Intel at all for it? Do you think of the future?
Speaker 3: Well, as you know, the supply chain is something that
Speaker 3: we work on, you know, very very meticulously. I think
Speaker 3: we have a very strong supply chain. We're certainly deeply
Speaker 3: partnered with you know, TSMC across the supply chain. You know,
Speaker 3: just to that earlier question, we're absolutely prioritizing building in
Speaker 3: the United States because I think that's super important. This
Speaker 3: is the US AI stack. We want to have as
Speaker 3: much of it in the US as possible, and you know,
Speaker 3: we continue to really look at, you know, how do
Speaker 3: we ensure that there will be a strong supply chain,
Speaker 3: you know, going forward.
Speaker 2: Greg Sam posted on x that this deal with a
Speaker 2: m D is incremental to what's already being done with Nvidia.
Speaker 2: But as least know so, I spent quite a lot
Speaker 2: of time looking at them I family and the newer
Speaker 2: generations of products to come. Is there a very clear
Speaker 2: specific benefit to using a m D technology for inference
Speaker 2: relative to the capabilities of Nvidia, or do you just
Speaker 2: see it broadly as some sort of diversifying factor.
Speaker 4: Well, I would look at it this way, that there's
Speaker 4: a huge fixed cost to getting AI models running on
Speaker 4: any platform, and so that when we look at what's
Speaker 4: out there, that actually getting AI training to work is
Speaker 4: a huge, huge amount of lift. That's something we've really
Speaker 4: only done the work for in Vidia, but for inference,
Speaker 4: that that's something that's much more that there's an easier
Speaker 4: barrier to entry there. And one thing we found is
Speaker 4: that I think that the work that Lisa and team
Speaker 4: have been doing on the M four to fifty series.
Speaker 4: It's looking like it's going to be a really incredible chip.
Speaker 4: I think that there's the way that these things work
Speaker 4: is that there's niches for different balances of memory and
Speaker 4: computational power, and so as we have a diversity of workloads,
Speaker 4: we're finding that having a diversity of chips also really
Speaker 4: accelerates what we're able to do.
Speaker 2: Lisa. At the beginning of this conversation, I said, there
Speaker 2: are both operational and financial milestones to be met, and
Speaker 2: Greg explained, you've got to start somewhere. So in the
Speaker 2: first instance, one giga what But would you just sort
Speaker 2: of draw out the pathway to that first giga what?
Speaker 2: You know, it seems like you're prepared to move quickly here.
Speaker 1: Yeah.
Speaker 3: Absolutely, And and maybe ed, if I can just build
Speaker 3: on something that Greg said, I think he's absolutely right.
Speaker 3: You know, we're a believer in there's a diversity of
Speaker 3: workloads and there will be a diversity of workloads across
Speaker 3: you know, customers, models, use cases, and from that standpoint,
Speaker 3: you know, we feel really good about how we're positioned.
Speaker 3: You know, we we love the work here because you know, frankly,
Speaker 3: you know, open Ai is the ultimate power user of
Speaker 3: our chips and and and test us in very good ways.
Speaker 3: So I think that's that's what gives us confidence that
Speaker 3: you know, the technology is there. And then to your
Speaker 3: point about milestones, Yes, I mean this is you know,
Speaker 3: clearly a case where we are tied to each other. Uh,
Speaker 3: the first gigawatt of deployment is super important. We're going
Speaker 3: to start that, you know, second half of next year,
Speaker 3: and we're going to build on from there. And it
Speaker 3: really is not just the technology, but you know, commercial milestones,
Speaker 3: adoption milestones, and and just how we proliferate the capability
Speaker 3: going forward. But I'm looking forward to building this as
Speaker 3: fast as possible. Well, you know, we're already working with
Speaker 3: a number of cloud service providers who are also very
Speaker 3: active on our technology, and I think this is a
Speaker 3: great catalyst to get the industry to build faster.
Speaker 1: Tied to each other is such an interesting turn of phrase.
Speaker 1: And Greg, look, you are seeing more AI users and
Speaker 1: chip makers and designers becoming more financially tied to each other.
Speaker 1: Is this going to continue? Is this the step forward
Speaker 1: for how you see this financing going forward?
Speaker 4: Well, I really see the world transitioning to this AI
Speaker 4: powered economy and The interesting thing is within open AI
Speaker 4: that we've really seen what it's like when your progress
Speaker 4: is limited and accelerated as true sides of the coin
Speaker 4: by computational power, like teams within open EI, that their
Speaker 4: ability to deliver really is tied to the amount of
Speaker 4: compute that they get. And I think we're heading to
Speaker 4: a world where that is how the whole economy will function.
Speaker 4: And we're starting to see it right that people having
Speaker 4: access to better AI tools. If you're a coder, you're
Speaker 4: able to do far more, or if you have access
Speaker 4: to better AI models, And we're heading to a world
Speaker 4: where if you can have ten times as much AI
Speaker 4: power behind you, you will probably be ten times more productive.
Speaker 4: And so I think that we're moving to a world
Speaker 4: where the whole industry is waking up to the fact
Speaker 4: that we have just not planned. We have not planned
Speaker 4: for this moment where this explosion in AI demand is happening.
Speaker 4: So it's happening all the way from the power to
Speaker 4: the silicon, and I think this whole industry has to
Speaker 4: find a way to actually rise to meet the occasion.
Speaker 2: Lisa, you have given us a look into the future
Speaker 2: before about how you see the total addressable market the
Speaker 2: industry now that the ink is dry with open AI
Speaker 2: and Greg, are you rethinking either your bigger picture analysis
Speaker 2: of the market for AI accelerators and GPUs or do
Speaker 2: you see AMD now having an improved position in that
Speaker 2: market relative of course to your friends at Nvidia.
Speaker 3: Well, again, I think, and I've told you before, I
Speaker 3: believe that this is a huge market we have saw
Speaker 3: is just the AI accelerator TAM being you know, over
Speaker 3: five hundred billion dollars in TAM over the next few years.
Speaker 3: I think some might say, you know, maybe I was
Speaker 3: a little conservative in that TAM analysis, but the way
Speaker 3: to think about it is there's so much need from compute.
Speaker 3: I mean, you just heard it from Greg, so you
Speaker 3: know this is a huge pie and you're going to
Speaker 3: see the need for you know, more players coming into it.
Speaker 3: And you know, from my standpoint, this is a big
Speaker 3: validation of our technology and our capability. You know, as
Speaker 3: much as we love the work with open AI, we're
Speaker 3: working with a lot of other customers as well. There's
Speaker 3: a lot of excitement in the industry around m I
Speaker 3: four fifty, so we're ready for it.
Speaker 1: M d C Lisa s f and AI President Greg Brockman,
Speaker 1: it's been a joy having you on the show. Thank
Speaker 1: you both very much.