AMD is planning to cut approximately 1,000 jobs, which represents 4% of its workforce.

• AMD, a chipmaker based in Santa Clara, announced on Wednesday that it will lay off 4% of its global staff as it seeks to strengthen its position in the AI chip market, which is currently dominated by Nvidia.

On Wednesday, it was announced that the global staff of the longtime CPU maker will be laid off by 4%, as the company seeks to strengthen its position in the growing artificial intelligence chip space, which is currently dominated by Nvidia.

"To align our resources with our largest growth opportunities, we are taking targeted steps that will unfortunately result in reducing our global workforce by approximately 4%. We are committed to treating impacted employees with respect and helping them through this transition."

According to an SEC filing, AMD had 26,000 employees at the end of last year.

AMD is the second-largest producer of graphics processors, or GPUs, after Nvidia. The company has stated that AI represents one of its biggest growth opportunities. Despite this, AMD's stock has fallen 5% in 2024, while Nvidia's shares have soared 200%, making it the most valuable publicly traded company in the world.

AMD offers powerful AI accelerators for data centers, such as the MI300X, which are popular among companies like Meta and Microsoft as an alternative to Nvidia-based systems. However, Nvidia holds a dominant market share for powerful AI chips, with over 80%, due in part to its development of the core software used by AI engineers to create programs like OpenAI's ChatGPT.

In October, AMD predicted that it would generate $5 billion in sales of AI chips this year, which is approximately 20% of the $25.7 billion in total sales projected by FactSet for AMD's 2024. Despite this, AMD anticipates that the total market for AI chips will reach $500 billion by 2028. However, Nvidia currently dominates the market, with FactSet projecting that it will generate $125.9 billion in revenue for calendar 2024.

AMD's gaming segment is projected to decline 59% in revenue to $2.57 billion by 2024, despite GPUs initially being designed for gaming.

AMD competes with Intel in the market for processor chips used in laptops, desktops, and servers. In the third quarter, AMD's share of server CPU sales increased by nearly 3% to 34%, as reported by Mercury Research.