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AMD, Super Micro Tumble as Earnings Fall Short of Lofty AI Expectations

A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
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AMD, Super Micro Tumble as Earnings Fall Short of Lofty AI Expectations

A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)
A smartphone with a displayed AMD logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Reuters)

Advanced Micro Devices and Super Micro Computer led a selloff in chip stocks on Wednesday after their earnings disappointed investors, who had piled into the sector on hopes rising AI investments would boost demand.

AMD was down 5.4% and is on course to lose more than $13 billion in market value.

Its forecast of $4 billion in AI chip sales for 2024 fell short of Wall Street's lofty expectations, having been used to Nvidia's massive forecasts over the past year.

Super Micro Computer, whose near-200% stock jump this year has outpaced even gains in Nvidia, tumbled over 11% as its third-quarter revenue missed estimates amid questions over the profitability of a new line of servers.

"As the market is shifting more towards risk-off over the last couple of days, it's not shocking that unless these companies are beating earnings by a mile that some of the hot air is coming out of them for now," said Russell Hackmann, president of Hackmann Wealth Partners.

Executives of both AMD and Super Micro Computer said supply constraints were hampering their efforts to capitalize on demand for equipment powering the boom in generative AI.

"Stepping back, AMD has several customers who are all trying to ramp MI300 (AI chip) very quickly. This is stressing the supply chain to a certain extent," said analysts at TD Cowen.

"However, from a demand perspective, customer engagement is in fact increasing, not only for MI300X but its successor products."

Other AI-linked chip firms also traded lower, with Marvell Technology down 1.5% and Nvidia falling 1.7%.

The stocks have widely outperformed the benchmark S&P 500 index this year and powered a 11% jump in the Philadelphia Semiconductor Index.

Several analysts were still positive on AMD, saying easing supply chain constraints should allow the company to increase its share of the AI chip market and potentially reap billions of dollars in revenue.

At least 10 analysts lowered their price target on AMD, while eight raised their view, according to LSEG data. Super Micro saw three price target increases and two cuts.

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Technology

US Accuses Chinese AI Firms of ‘Malicious’ Copying of AI Technology

A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. (Reuters)
A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. (Reuters)
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US Accuses Chinese AI Firms of ‘Malicious’ Copying of AI Technology

A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. (Reuters)
A DeepSeek AI sign is seen at a building where the Chinese start-up's office is located in Beijing, China, February 19, 2025. (Reuters)

The US government on Tuesday accused Chinese artificial intelligence companies of maliciously copying technology from American AI firms, potentially complicating relations ahead of a planned meeting between leaders of the world's two biggest economies later this month.

The Chinese companies copied US AI labs’ intellectual property through a technique known as distillation, according to a statement from US law enforcement and intelligence officials. Distillation is the process of training smaller AI models using output from larger, more expensive ones as part of an effort ‌to lower the ‌costs of training a new AI tool.

US ‌officials ⁠accused six Chinese ⁠companies, including DeepSeek, Moonshot AI and Alibaba, of tapping variants of American-made AI models to train their AI products more quickly.

The companies did so "likely with Chinese government awareness," according to the statement from US officials, who added that the Chinese companies targeted AI models from Anthropic, OpenAI, Alphabet's Google and SpaceX.

"China-based AI companies are engaging in aggressive, malicious and ⁠targeted distillation activities at an industrial scale," the officials ‌said.

US officials made the allegations ‌as the administration of President Donald Trump prepares for Chinese President Xi Jinping's visit ‌to the US in late September. The US and China are ‌also gearing up to discuss AI safety risks during a dialogue planned for mid-September, Reuters previously reported.

In response, Chinese foreign ministry spokesperson Mao Ning said on Wednesday that China's AI advances were the result of "achieving high-level ‌science and technological self-reliance."

"We hope the US will earnestly implement the important consensus reached by the leaders ⁠of both ⁠countries and refrain from making false accusations and smearing China," Mao said.

"As major powers in artificial intelligence, China and the US should strengthen cooperation."

The US made a similar accusation in April ahead of Trump's visit to Beijing.

The Tuesday statement alleged that the distillation not only reduces research and development costs for Chinese AI firms, but also enhances China's “military and cyberattack capabilities that could be used against the US and our allies.”

Reuters reported on July 31 that Chinese military researchers have used outputs from leading US AI models to train domestic Chinese AI systems and advance China's defense capabilities.

Technology

OpenAI Says Working with Samsung on Next-Generation Chips, Deepening Cooperation

The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. (Reuters)
The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. (Reuters)
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OpenAI Says Working with Samsung on Next-Generation Chips, Deepening Cooperation

The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. (Reuters)
The logo of Samsung is seen on a building during the Mobile World Congress in Barcelona, Spain February 25, 2018. (Reuters)

OpenAI is deepening cooperation with Samsung Electronics as the ChatGPT maker develops its own chips, expanding ties with the South Korean technology giant across semiconductors and enterprise AI services.

"One of the areas where we have made the most progress and gained the most recognition with Samsung Electronics is our joint production and research on the next-generation chips we are developing," Harrison Kim, General Manager of OpenAI Korea, said at a press ‌conference in Seoul ‌on Wednesday, without elaborating.

Kim also said Samsung Electronics was "one ‌of ⁠the largest-scale deployments of ⁠ChatGPT globally," saying the company's employees in Korea and overseas use ChatGPT for work across research and development, marketing and sales.

Samsung Electronics said in a statement that it could not confirm information related to customers.

In June, OpenAI unveiled its first custom artificial intelligence chip designed with Broadcom. OpenAI's engineers designed the chip, called Jalapeno, together with Broadcom for a task known as AI inference, the ⁠process of crunching data to answer queries in applications ‌such as ChatGPT.

OpenAI at that time said that ‌Taiwan's TSMC would manufacture the chips.

Last year, Samsung Electronics and SK Hynix signed letters ‌of intent to supply memory chips for OpenAI's Stargate data center project.

Kim ‌said demand for memory chips would continue to grow as more advanced chips were needed to enable faster and more complex computing, making cooperation with South Korean semiconductor suppliers a priority for OpenAI's local office.

The cooperation comes as Samsung broadens its ‌use of generative AI. The company said in June that workers in its Device eXperience division, which oversees mobile ⁠phones, televisions and home ⁠appliances, would be allowed to use ChatGPT, Google's Gemini and Anthropic's Claude internally.

OpenAI said the number of ChatGPT Enterprise users at South Korean companies and institutions had surged about 28-fold as of the end of August from a year earlier, as businesses broadened their use of artificial intelligence from individual tasks to company-wide operations.

Companies were increasingly using AI across functions including legal, sales, finance, marketing and operations, OpenAI said. The company declined to provide absolute user numbers.

South Korea had the largest number of paying ChatGPT subscribers outside the United States as of late last year, according to OpenAI.

OpenAI expects adoption to accelerate following the September 4 launch of GPT-6 Astra, its latest model, which it said offered improved performance in computer use, professional work, science, coding and cybersecurity.

Technology

Communications Minister Discusses Strengthening Saudi Arabia’s AI Partnerships in Silicon Valley

Minister of Communications and Information Technology Abdullah Alswaha's meetings are part of Saudi Arabia’s efforts to expand its international partnerships and attract high-value investments in AI and advanced technologies. (SPA)
Minister of Communications and Information Technology Abdullah Alswaha's meetings are part of Saudi Arabia’s efforts to expand its international partnerships and attract high-value investments in AI and advanced technologies. (SPA)
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Communications Minister Discusses Strengthening Saudi Arabia’s AI Partnerships in Silicon Valley

Minister of Communications and Information Technology Abdullah Alswaha's meetings are part of Saudi Arabia’s efforts to expand its international partnerships and attract high-value investments in AI and advanced technologies. (SPA)
Minister of Communications and Information Technology Abdullah Alswaha's meetings are part of Saudi Arabia’s efforts to expand its international partnerships and attract high-value investments in AI and advanced technologies. (SPA)

Saudi Minister of Communications and Information Technology Abdullah Alswaha held a series of meetings with leaders of global technology and investment companies during the first day of his visit to Silicon Valley in California, reported the Saudi Press Agency on Wednesday.

The meetings focused on strengthening investments and partnerships in artificial intelligence (AI), computing capabilities, and deep technologies, as well as supporting the growth of Saudi startups and their expansion into global markets.

Alswaha met with Co-Founder and General Partner at Andreessen Horowitz Ben Horowitz to discuss expanding the firm’s investments in the Kingdom and in Saudi startups. The meeting also addressed connecting companies within its investment portfolio with HUMAIN’s computing capabilities to support their expansion in the Kingdom and the region, while enabling Saudi companies to access global markets.

He met with Partner at Sequoia Capital Alfred Lin to discuss increasing the firm’s investments in Saudi AI and deep-tech companies, connecting companies within its investment portfolio with HUMAIN’s computing capabilities, and supporting the growth and global expansion of Saudi companies.

In the field of advanced technologies, Alswaha met with CEO and Co-Founder of TenX Semi Dr. Suk Hwan Lim to discuss the use of AI agents in chip design and verification, accelerating development cycles, and applying autonomous design technologies to support the development of advanced semiconductor design capabilities in the Kingdom.

These meetings are part of Saudi Arabia’s efforts to expand its international partnerships and attract high-value investments in AI and advanced technologies, while supporting the growth and global expansion of Saudi startups, reinforcing the Kingdom’s position and boosting the competitiveness of its digital economy globally.