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Welcome to our global audience across Bloomberg television and radio. We're joined by AMD's CEO, Lisa Sue. And it was such an interesting quarter to look back at data center in particular CPU strength, not just accelerators, strong AI outlook on accelerators, gaming PC and then some concern about the future of the China business. But Caroline and I Lisa have talks for quite a while now about AMD as
the best performing chip stock so far this year. I wondered if we start by just asking what in the quarter changed for AMD, what the kind of biggest move forward was, do you think.
Yeah, absolutely so, first of all, and Caroline, great to be here with you. We always look at these things, and so when we have a business where all of our businesses are actually performing extremely well, it's a good it's a good place to be. So we had a very strong first half of the year, you know, second quarter up thirty two percent.
Year over year.
We're guiding to a third quarter you know, up twenty eight percent. And underneath that what you see is, you know, first of all, data center business is doing extremely well. Our server CPUs are continuing to gain share in cloud and in enterprise. One of the things that we're seeing with AI is the AI investments from the largest hyperscalers are actually pulling you know, both GPU and CPU revenue, you.
Know, which is good for us overall.
You know, agentic AI actually requires lots and lots of compute going forward. We're also seeing strength in you know, PCs as well as gaming. Our products are extremely well positioned, whether you're talking about you know, consumer or commercial. And then we're also seeing you know, some improvement in the embedded side of our business as you know, that is also you know, going to I would say, a return
to growth in the second half of the year. So we've seen a lot of positive signals over the last ninety days in terms of, you know, what the market needs from computing and sort of the investment and things.
You know.
There are some questions about China, of course, which you know, we can certainly talk about.
Well, let's talk first about the AI Accelerator outlook, because actually from analysts to investors to the develop a community, when we say that you're coming on the show, we get questions from all quarters. You had said that the AI Accelerator business will grow to the tens of billions. And what I'm kind of seeing is people just want granularity from me, Lisa a little bit like when does
that happen? And when does it happen? And you talked about the hyperscalers, but what's the growth pathway to tens of billions in accelerator revenue?
Yeah?
Absolutely, ed, So let me give you a few important markers. So what we said is the second half of the year, our growth would be primarily driven in the data center by accelerators. We've launched a new product just in ju I three fifty five product. It's extremely competitive. We really like how we stack up in terms of total cost of ownership for inferencing and training workloads. Customers really like
that product. That's driving some of our second half growth, and certainly when we talk about our sequential growth into Q three, that's being primarily driven by.
That accelerator capability.
And now when you extend forward, you know, I've said that the AI TAM for accelerators and data center will be over five hundred billion over the next couple of years. You know, we expect to get a large portion of that new accelerator TAM and that's how we get to
tens of billions of dollars. Very key is also you know, we've accelerated our roadmap and so we are on an annual cadence, and next year we'll have yet a new capability with our MI four hundred series, which will bring full rack level solutions, which will be another giant step forward in terms of capability.
For you know, AI solutions.
So I think that's the roadmap and path for the next couple of years. We're really excited about the traction. We're getting lots of customer validation saying hey, you're on absolutely the right path, and you know we're making you know, strong progress towards those goals.
Lisa, the granularity there was demanded time and time again on that earning score with analysts was around China though, And I know it's so hard to give because in many ways, as m I threeh eight, it's depending on the licenses from the US government. How are those discussions going with the US government. How quickly do you think they can get through the backlog?
Yeah, Caroline, definitely.
Look, you know, I know people always want precision, and what I will give you is exactly how things are playing out from our standpoint, I think we've seen an improvement over the last ninety days. You know, ninety days ago, you know, we did not expect to believe to ship, to be able to ship to China because of some
of the regulations. I think this administration, you know, the Department of Commerce, the government has actually been very open to trying to find the right balance between national security and ensuring that we have AI USAI technologies proliferated across the world.
So we think that's a great balance.
We now know that we have a number of licenses that are under review. We've been given good indications that.
Those are moving through the review process.
And you know, we will certainly inform everyone when the licenses are granted. But given that it's hard to predict exact timing. Just given all of the things that are in front of the government at the moment, we thought the right thing to do right now is just say, hey, let's not include that in the third quarter revenue. But even with that, we're growing twenty eight percent year over year,
which is fantastic growth rate. And if you asked me, you know, what we've learned in the last ninety days, We've learned that the demand is even stronger in the second half of the year. Then we necessarily thought maybe just a few months ago.
And analysts really cooperated and thought it was right that we should see such caution perhaps and not show up in the numbers. But Lisa, I'm interested in the inventory that you had been very clear about the eight hundred million dollar knock on the fact that you couldn't access China for a while. I know that most of those manufacturing hadn't been complete, but do you think you can unwind that eight hundred million how much do you think can you bring that back to bear?
Well, we certainly expect that once licenses are approved that we will restart our supply chain and get those in place. We do have, you know, a bit of time that it takes to complete those, but we would expect to be able, you know, to ship some of those products as licenses are approved. And you know, again the exact
timing will depend on when licenses are approved. But I again would hope that we don't get caught up in you know, something that I would say is moving actually in the right direction, and really see like the overall business is doing extremely well. Right when I look at data center growth. When I look at client and gaming growth, and really the return to growth in the embedded those are the key aspects to really understand about where the business is today.
Lisa. The final question that we have on China, if I may, is something that we've also discussed quite often with Nvideo and Jensen One, which is the idea that in the interim period you just outlined, China's domestic chip makers have made some progress on their own accelerators. Does a m D make an assessment of that of how performance a comparable Huawei or other Chinese accelerator is relative to them? I three hundred family.
And of course I mean long it's a very competitive market out there. At the end of the day, everybody wants AI computing, like AI computing is the foundation for you know, all the great things that we know that AI can add to, you know, businesses and you know sort of the overall capabilities. So yes, we're always looking at the competitive environment. That being the case, you know,
I think we are well positioned overall. Our roadmap for the rest of the world is very strong, and we think it is just getting strong longer as we go forward, and as it relates to China. It's something that we have to work through with the administration, but as I said, we've had very close conversations and we're making good progress there.
So from that standpoint, you know, I think the overall competitiveness of our AI roadmap has never been stronger, and we're excited about what we can deliver across you know, AI GPUs as well as you know, our our CPU franchise and all of the rest of our portfolio.
This is Bloomberg Tech Live on Bloomberg Television and Bloomberg Radio, and we're speaking with a m D CEO, Lisa Sue Strong in PC strong in server, particularly CPU. Is that an a m D capturing market share story or is that just a rebound in demand generally story? Lisa Well, I.
Think it's both.
Ed.
I think the demand is is good. I think the demand patterns are better. But clearly we're very very competitive with our products. I think we leadership CPUs in both server and client. We've shown significant traction in cloud as well as enterprise, and I think going forward you're going to see, you know, enterprise customers want the best solution out there, and that is you know, a MD for computing.
And gaming NISA so strong. I'm interested into the nuance of pull forward because you said on the call that you didn't see a whole lot of pull forward. Are people trying to get ahead of tarifs and price increases, But did you see any.
You know, very little, Caroline.
I think what we look at mostly is not just what we're selling in to customers, but we actually look at what's being sold out at end customers, and what we're seeing being you know, really transferred to end customers is good demand. I mean, people are refreshing their data centers, which is very positive. Right We're in a place where computing is important, and so we're seeing strong refresh cycles
on the data center side. We're seeing strong pull through of our of our solutions in the in the enterprise, in PC, and then from a gaming standpoint, again, we have a very strong product cycle. So you know, there's it's always hard to tell exactly what the impact of the current tariffs are, but I would say that that's the smaller part of the impact on our business. The larger part is just strong products, you know, very good traction from customers and looking at a stronger second half.
Of the year, a stronger second half of the year where you take some market share from Nvidia. Lisa, how are you seeing that grow out and the ability to compete with the next ranger chips.
Well, we are very bullish on our overall roadmap capability. I think the second half of the year has a number of customers, you know, really broadly adopting a MD.
Lisa, I have a question from our audience, if that's okay a viewer of Bloomberg Tech and as you know, like loads of AMD employees, your peers, technology industry people want to hear what you have say. I'm just going to read it to you. Can Lisa, please explain AMD's winning and gaming and consoles. But AI is where the margins are. Now, what's the plan to make a MD indispensable to the next open AI and not just cost effective alternative? I think to invideor is what they're saying.
Well ed.
The best way to say that is for you know, those of you who know us as a company, you know we execute extremely well.
You know, our roadmaps are strong.
We're very excited about all of the progress that we've made. You know, I three hundred was an excellent product. I three p fifty is you know, a big increase above that, and then our next generation is also and the key for us if you look at our history, our history is doing what we say we're going to do, delivering to customers, delivering total cost of ownership and with that,
you know, being a great partner. And so from that standpoint, I think you can be very confident that we have a strong roadmap and we're going to execute on it well. And you know, our largest customers want to have a dependable and good partner.
It's been wonderful spending time with you, Lisa sou A m d CEO. We thank you very much