Meta and Microsoft say they will buy AMD’s new AI chip as an alternative to Nvidia’s

Meta, OpenAI, and Microsoft said at an AMD investor event Wednesday they will use AMD’s newest AI chip, the Instinct MI300X. It’s the biggest sign so far that technology companies are searching for alternatives to the expensive Nvidia graphics processors that have been essential for creating and deploying artificial intelligence programs such as OpenAI’s ChatGPT.

If AMD’s latest high-end chip is good enough for the technology companies and cloud service providers building and serving AI models when it starts shipping early next year, it could lower costs for developing AI models and put competitive pressure on Nvidia’s surging AI chip sales growth.

“All of the interest is in big iron and big GPUs for the cloud,” AMD CEO Lisa Su said Wednesday.

AMD says the MI300X is based on a new architecture, which often leads to significant performance gains. Its most distinctive feature is that it has 192GB of a cutting-edge, high-performance type of memory known as HBM3, which transfers data faster and can fit larger AI models.

Su directly compared the MI300X and the systems built with it to Nvidia’s main AI GPU, the H100.

“What this performance does is it just directly translates into a better user experience,” Su said. “When you ask a model something, you’d like it to come back faster, especially as responses get more complicated.”

The main question facing AMD is whether companies that have been building on Nvidia will invest the time and money to add another GPU supplier. “It takes work to adopt AMD,” Su said.

AMD on Wednesday told investors and partners that it had improved its software suite called ROCm to compete with Nvidia’s industry standard CUDA software, addressing a key shortcoming that had been one of the primary reasons AI developers currently prefer Nvidia.

Price will also be important. AMD didn’t reveal pricing for…