Chip Giant AMD Says AI to Be ‘Mega-Trend’ for Computing World

 AMD Chief Executive Lisa Su makes a speech at National Yang Ming Chiao Tung University in Hsinchu, Taiwan July 20, 2023. (Reuters)
AMD Chief Executive Lisa Su makes a speech at National Yang Ming Chiao Tung University in Hsinchu, Taiwan July 20, 2023. (Reuters)
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Chip Giant AMD Says AI to Be ‘Mega-Trend’ for Computing World

 AMD Chief Executive Lisa Su makes a speech at National Yang Ming Chiao Tung University in Hsinchu, Taiwan July 20, 2023. (Reuters)
AMD Chief Executive Lisa Su makes a speech at National Yang Ming Chiao Tung University in Hsinchu, Taiwan July 20, 2023. (Reuters)

AI will be the "defining mega-trend" for the global computing industry, the head of chip giant AMD said Thursday in Taiwan, where the majority of the world's semiconductors powering the technology is produced.

California-based Advanced Micro Devices (AMD) is one of the world's largest chip suppliers -- rivalling giants Intel and Nvidia -- and their processors are used in everything from gaming consoles and laptops to massive servers.

In the past year, tech companies have shifted resources to developing chips that have the processing power for generative AI -- which churns out complex content in seconds -- after seeing the popularity of products such as ChatGPT.

"The innovation opportunities ahead of us are truly enormous and the computing industry is changing very fast," said AMD's CEO Lisa Su, in Taiwan to receive an honorary doctorate from a university in the city of Hsinchu.

"AI is really the defining mega-trend for the next 10 years," she said, adding that generative AI has reshaped how industry players think about tech's possibilities.

"Every product, every service, every business in the world will be impacted by AI, and the technology is actually evolving faster than anything than I've ever seen before," Su said in her speech to the university.

As a chip design foundry, AMD outsources the production of their microchip designs to Taiwan Semiconductor Manufacturing Company (TSMC), which is headquartered in Hsinchu.

The Taiwanese chipmaking giant controls half the world's output of the silicon wafers, which are used to power everything from drip coffee machines to cars and missiles.

Unlike the AMD chief, TSMC's chairman Mark Liu cautioned investors on pinning their expectations of a boom in chips due to generative AI.

"The short-term frenzy about AI demand definitely cannot be extrapolated for the long term," Liu told shareholders in a conference call Thursday -- held around the same time as the university ceremony Su attended.

"Neither can we predict for the near future, meaning next year, how the sudden demand will continue or flatten out."

TSMC reported a 23 percent drop in its second quarter net income to about $5.85 billion.

"Our second quarter business was impacted by the overall global economic conditions, which dampened the end market demand, and led to customers' ongoing inventory adjustment," said Wendell Huang, TSMC's VP and chief financial officer.

The company also announced that its long-awaited Arizona plant -- the first in the United States -- has met delays, due to "an insufficient amount of skilled workers", and the start of production will be pushed to 2025, Liu said.



Google-parent Alphabet Earnings Shine with Help of AI

Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
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Google-parent Alphabet Earnings Shine with Help of AI

Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP
Google parent company Alphabet's cloud computing business is on pace to bring in $50 billion over the course of 2025, according to the tech giant. Manaure Quintero / AFP

Google-parent Alphabet on Wednesday reported quarterly profits that topped expectations, saying artificial intelligence has boosted every part of its business.

Alphabet's second-quarter profit of $28.2 billion -- on $96.4 billion in revenue -- came with word that the tech giant will spend $10 billion more than it previously planned this year on capital expenditures, as it invests to meet growing demand for cloud services.

"We had a standout quarter, with robust growth across the company," said Alphabet chief executive Sundar Pichai.

"AI is positively impacting every part of the business, driving strong momentum."

Revenue from search grew double digits in the quarter, with features such as AI Overviews and the recently launched AI mode "performing well," according to Pichai.

Ad revenue at YouTube continues to grow along with the video platform's subscription services, Alphabet reported.

Alphabet's cloud computing business is on pace to bring in $50 billion over the course of the year, according to the company.

"With this strong and growing demand for our cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately $85 billion and are excited by the opportunity ahead," Pichai said.

Alphabet shares were up nearly 2 percent in after-market trades that followed the release of the earnings figures.

Investors have been watching closely to see whether the tech giant may be pouring too much money into artificial intelligence and whether AI-generated summaries of search results will translate into fewer opportunities to serve up money-making ads.

The internet giant is dabbling with ads in its new AI Mode for online search, a strategic move to fend off competition from ChatGPT while adapting its advertising business for an AI age.

The integration of advertising has been a key question accompanying the rise of generative AI chatbots, which have largely avoided interrupting the user experience with marketing messages.

However, advertising remains Google's financial bedrock.

"Google is doing well despite tariff headwinds and rising AI competition in search," said eMarketer principal analyst Yory Wurmser.

"It's also successfully monetizing AI Overviews and AI Mode, a good sign for the future."

Google and rivals are spending billions of dollars on data centers and more for AI, while the rise of lower-cost model DeepSeek from China raises questions about how much needs to be spent.

Antitrust battles

Meanwhile the online ad business that generates the cash Google invests in its future could be neutered due to a defeat in a US antitrust case.

During the summer of 2024, Google was found guilty of illegal practices to establish and maintain its monopoly in online search by a federal judge in Washington.

The Justice Department is now demanding remedies that could transform the digital landscape: Google's divestiture from its Chrome browser and a ban on entering exclusivity agreements with smartphone manufacturers to install the search engine by default.

District Judge Amit Mehta is considering "remedies" in a decision expected in the coming days or weeks.

In another legal battle, a different US judge ruled this year that Google wielded monopoly power in the online ad technology market, another legal blow that could rattle the tech giant's revenue engine.

District Court Judge Leonie Brinkema ruled that Google built an illegal monopoly over ad software and tools used by publishers.

Combined, the courtroom defeats have the potential to leave Google split up and its influence curbed.

Google said it is appealing both rulings.